Africa Telecoms Dec/Jan 2010

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CONTENTS

December 2009 /January 2010 04 Guest Editorial

20 Calendar

H.E. Akossi Akossi, SecretaryGeneral, African Telecommunications Union (ATU)

06 News

The latest local and global telecoms news.

p.22

Upcoming events, shows and conferences which you can’t afford to miss.

26 Gadgets

Want the next big thing in portable devices? Our gadget review is here to help you choose.

40 Statistics

Africa Telecoms presents statistics and data on the IP revolution.

Harald Braun Thought Leadership The International Telecom CEO of the Year 2009 gives us insights into his company, Harris Stratex Networks.

p.30 IP Revolution Resistance to the introduction of VoIP on the African continent is showing signs of weakening, but many countries still resist due to self interest.

p.42

Special Report: The Year in Review A summary of some major events in a year where the focus was on financial prudence rather than fireworks:

48 Google Uganda

SMS to serve needs of the poor. An exciting partnership between MTN Uganda, the Grameen Foundation and Google.

52 Cyber Attacks

Some argue these attacks are over sensationalised but can we afford to ignore it?

58 Harnessing Telecoms

Operations as a development engine.

63 GSR-09

Africa Telecoms attends the 9th Global Symposium for Regulators held in Beirut, Lebanon.

67 Q&A

Dr Mohammad Shakouri, vice president, WiMAX Forum.

72 Africom Conference

A report on the conference held in Cape Town.

75 Tenders

A list of the latest telecoms tenders from across Africa.

76 Last Word

Google unleashes its latest offering – Google wave.

AFRICA TELECOMS Executive Editor Mohammed Khan mkhan@3ipublishing.co.za Managing Editor Bradley Shaw bshaw@3ipublishing.co.za Sales Director Sarah Theron stheron@3ipublishing.co.za Printing Tandym Press

Web Development Alexander Fleming, xflemming@3ipublishing.co.za Wilbur Taute Publishing Consultants SchreiberFord Publications Contributors Ken Wieland, Lesley Stones, Rachel Payne, Leslie Pean, Brett Haggard and Johann Barnard

Africa Telecoms and Africa Telecoms Online is published monthly by 3i Publishing.

Unit 9, Planet Art 2, 32 Jamieson Street, Cape Town 8001 T: +27 21 426 5590 E: info@3ipublishing.co.za www.3ipublishing.co.za www.africatelecomsonline.com BPA Worldwide Business Publication Audit Membership Applied for – October 2009.

Guest Editorial

H.E. Akossi Akossi

Secretary-General, African Telecommunications Union (ATU) The African Telecommunications Union (ATU) is the leading continental organization fostering the development of information and communication technologies infrastructure and services, with a current membership of 46 Member States and 17 Associate Members. It was founded in Kinshasa in 1977 as a specialized agency of the Organization of African Unity (OAU), now African Union (AU), in the field of telecommunications.

With the convergence of Telecommunications and Information Communication Technology (ICT), Telecommunications Regulators have now evolved into ICT Regulators. Effectively, this process has seen Regulators take up new roles especially in the management of critical Internet resources and Cybersecurity.

The Africa Telecommunications Union (ATU) has also aligned its mandate with that of its membership to ensure that it serves its membership effectively.

As the Internet continues to change human culture globally, the keen management of the critical resources that make up the Internet, including Internet Domain Names and Internet Protocol (IP) addresses, has become a priority area for Member States. As such, the ATU, as the continental body fostering the development of ICTs, is taking a leading role in creating awareness on the management of these critical resources and facilitating the engagement of its Member States in this vital process.

The Domain Name System (DNS) is the glue of the Internet. It is the system that maps easy-to-remember Internet domain names (like www.atu-uat.org) to complex Internet Protocol (IP) addresses (like 192.168.1.101). As such, domain names form a very important part of the Internet, especially as the interface between humans and the complex technical implementation of the Internet.

Further, domain names play a key role in the implementation of various ICT areas including e-commerce, e-government services, e-education and the development of local content, among others.

As such, the proper management of domain names, and especially country code Top Level Domain names (ccTLDs) which identify countries on the Internet, has emerged as a key priority area for our Member States as this will not only facilitate the deployment of e-services but will also facilitate the development of sound frameworks for the management of Cybersecurity framework.

To this end, in March 2009 the ATU organized a continental Internet Governance Forum which centered on the management of country code Top Level Domains (ccTLDs) in Africa. The inaugural forum, whose theme was “a ccTLD for Every Country in Africa”, targeted policy makers and ICT regulators in Africa. As

4 AFRICA TELECOMS December 09 / January 2010

a public private partnership organisation, the ATU engaged other stakeholders including the Internet Corporation for Assigned Names and Numbers (ICANN), the Internet Society (ISOC), the Africa Top Level Domain Organisation (AfTLD) and the Africa Network Information Centre (AfriNIC), all key stakeholders in the management of the Internet. The outcome of this meeting was a declaration, the “Pailles Declaration”, which spelt out resolutions that would set the stage for the enhanced involvement of Member States in the management of their ccTLDs. A follow up stock-taking forum is scheduled for 2010.

The ATU will continue facilitating the engagement of its Member States in the management of the Internet as part of its broader mandate of fostering the development of information

and communication technologies infrastructure and services.

Key on the ATUs agenda is the enhanced management of country code Top Level Domains (ccTLDs) in Africa and facilitating the development of sound Cybersecurity frameworks for its Member States. With the imminent depletion of the current Internet Protocol, Internet Protocol version 4(IPv4), the ATU plans to create awareness on the deployment of the new Internet Protocol, Internet Protocol version 6 (IPv6). The ATU will also work with various partners in building capacity in Africa, especially in the management of ccTLDs, the deployment of IPv6 and the setting up of Computer Emergency Response Teams (CERTs).

As we experience the IP revolution, the ATU is positioning itself as a key player and facilitator and not a spectator in this landmark. At the same time, we appreciate the global nature of this process and welcome collaboration and partnerships with the rest of the world as we move Africa into global information society. Thank you! Merci! AT

Global Managed Services

NT_Anzeige-Johannes_A4_2009.indd 1

10.12.09 16:42

News

Peter Campbell

Synchronica win contract

Emergency communication plan CITU, Inmarsat and Vizada conclude agreement to enhance mobile telecommunication capacity for emergencies. ITU, Inmarsat and Vizada SAS have reached an agreement to improve emergency communications for disaster preparedness and to coordinate relief activities in the aftermath of a disaster.

Inmarsat and Vizada are donating 70 BGAN terminals, highlyportable devices capable of delivering voice and broadband data, to the ITU. The equipment will enhance ITU's capacity in deploying mobile telecommunications to assist countries in preparing for disaster and in strengthening response and recovery mechanisms.

Synchronica plc, the AIM listed mobile email and data synchronisation provider, announced that it had received a purchase order for US$ 197,000 for an initial 20,000-user license from a West-African mobile operator for its award winning mobile email product Mobile Gateway, as well as a contract for professional services.

The order is the fifth deal in this region in 2009 and the 12th operator contract announced by the Company for 2009.

This is the third order received through the same major network equipment provider, demonstrating the effectiveness of the strategy to use channel partners to accelerate the roll-out of

Mobile Gateway.

The operator will use Synchronica's Mobile Gateway technology to offer a push mail and mobile synchronisation service to its subscribers.

Synchronica's industrystandard technology requires no additional software client to be downloaded to the handset and enables push email for the broadest range of handsets, from high-end smartphones to low-cost entry-level devices.

According to a report from Blycroft Publishing, a UKbased telecommunications publisher, Africa's mobile phone market grew by 25% in 2008, attracting 74 million new subscribers and taking the total number of subscribers to 370 million.

MTN Virtual MTN Cameroon, one of Africa’s leading telecommunications providers, announced that it has successfully launched ‘MTN Virtual’, a service that considerably transforms the economics of individual telephony access and has enabled MTN to gain rapid entry into the vast and under-penetrated BOP (base of pyramid) consumer segment.

MTN Virtual is based on Comviva’s award-winning Virtual SIM solution.

Virtual SIM requires no special handsets, SIM cards or additional client software - it works instantly on all mobile handsets. By deploying Comviva’s Virtual SIM solution, MTN has been able to extend affordable communications to people unable to own a handset. Previously underserved

segments can now make and receive calls, send and receive SMSs and make remittances, virtually, using other people's phones.

These consumers currently share phones with family and friends, use street side payphones managed by agents, or community phones. With Virtual SIM they gain a unique mobile identity, with their own phone number and virtual phone account. MTN Virtual has gained strong traction in the Cameroon market, gaining over 30,000 new subscribers in less than 8 months of operation. Speaking about the success of MTN Virtual, Cielo Nzokiza, Consumer Segment Manager, MTN Cameroon, said, “With MTN Virtual we are introducing a whole new group of people to the power of mobile communications.”

>> The global telecommunications network is the world's largest man-made artefact. >>

6 AFRICA TELECOMS December 09 / January 2010

News

State-of-the-art ICT Museum The new Geneva-based showcase will highlight the evolution of information and communication technologies. ITU Secretary-General, Dr Hamadoun Touré and the Director-General of the Telecommunications Regulatory Authority (TRA) of the United Arab Emirates, Mr Mohamed Al Ghanim, signed an agreement for the establishment of a brand new museum of information and communication technology which will focus on the past, present and future impact of ICT on the world.

The museum will be called the ICT Exploratorium and will be housed at the ITU headquarters in Geneva.

The signing of the agreement sees the United Arab Emirates and the Telecommunications Regulatory Authority (TRA) of UAE become the Founding Partners of the new learning centre, through a donation of USD 2-million towards its design and construction. ITU will undertake the acquisition of exhibits, equipment and other resources.

MCTEL Advanced Messaging Solutions As the non-voice data market is booming worldwide, this trend is definitely true in Africa where the MCTEL innovative portfolio is tailor-made for mobile operators looking to develop mobile services on their network.

“Despite the economic crisis, MCTEL is pleased to announce excellent results for 2009, partly supported by the dynamism of the African market.” announces Franck Julien, MCTEL General Manager.

The African mobile users are demanding mobile services to improve their everyday life such as pricing information for agriculture products or payment mode via SMS. The MCTEL advanced messaging solutions help mobile operators address this need by providing reliable and easy-todeploy messaging platforms. “As an example, the MCTEL USSD Gateway solution is very demanded on the African market. It allows mobile operators to offer and manage innovative and low costs mobile services to their customers.” explains Dr Daniel Mavrakis, MCTEL CEO. With the mobile VAS market rapidly growing, especially in the Northern and Western African countries, mobile operators need solid and welltried solutions to manage both the VAS connectivity and the content delivery operations. “Since you can only charge the service if delivered, mobile operators have a strong interest in deploying service delivery platforms such as MCTEL VAS Connectivity Gateway” adds Dr Mavrakis.

>> Undersea cables for transmitting telegraph signals antedated the invention of the telephone; the first was laid in 1850 between England and France. >>

December 09 / January 2010 AFRICA TELECOMS 7

News ers with tn r a p m m o C Eppix Systems ic g o L s s e in s Bu EppixComm has partnered with Business Logic Systems to help African mobile operators increase loyalty and drive customer retention. EppixComm, an end-to-end customer care and billing solution provider, has today announced a partnership with Business Logic Systems, a specialist in customer intelligence, marketing automation and customer loyalty solutions for mobile network operators. Working together the two companies will help African mobile operators turn their prepaid customer data into a powerful marketing tool that can help increase retention and loyalty.

Using Business Logic Systems’ suite of InTelestage™ solutions marketing departments can quickly and easily access, analyse and act upon event data in real-time to create an interactive, twoway dialogue with customers. Designed specifically for mobile operators, In Telestage instantly reduces churn, drives loyalty and increases the lifetime value of subscribers. It has been designed specifically to offer easy integration with third-party systems such as EppixComm’s prepaid infrastructure enabling them to offer additional value add services to its existing and future mobile customers.

“For the first time since the introduction of mobile phones in Africa, the market is reaching saturation point and operators now must differentiate themselves if they are to retain and attract customers,” commented Rahul Kalla, Global Sales Director for EppixComm. “By partnering with Business Logic Systems we can help our clients quickly roll out targeted, fully-automated loyalty campaigns to reward and retain profitable mobile subscribers.”

“EppixComm is one of the most respected and successful customer care and billing solutions providers in Africa with 40 per cent of the market,” commented Richard Lewis, Chief Sales Officer for Business Logic Systems in EMEA. “Having endorsement from such an influential company will aid our growth in Africa and at the same time enable us to help mobile network operators solve the age-old problem of i ncreasing customer loyalty.”

ICT regulators share vision Global ICT regulators share vision of tomorrow's networks and services as ubiquitous broadband becomes the new baseline, ITU urges governments to pursue enlightened policies that drive rollout, innovation and affordable pricing.

Delegates to ITU's 9th Global Symposium for Regulators on 10-12 November spoke of the pressing need for governments to open markets to greater competition and use incentives to stimulate investment in the broadband networks that are fast becoming the lifeblood of the Knowledge Economy.

The meeting, which welcomed a total of 648 participants from 89 countries, sought to forge a shared vision and understanding of the many challenges now facing ICT regulators in increasingly complex converged markets.

Investment in Tanzanian ISP Convergence Wireless Networks (Convergence Wireless), a joint venture between Convergence Partners and Comsol Wireless Solutions (Comsol), announced that it has acquired a 35% stake in WIA Company Limited (WIA), a Tanzanian wireless connectivity provider focused on the enterprise market segment.

Convergence Wireless will take on an active role in the business by providing highlevel support at a strategic and operational level but also facilitate access to resources across the wider Convergence Partners network to accelerate WIA’s evolution into a fully fledged converged communications solutions provider. Comsol will act as WIA’s technology partner bringing significant knowledge and expertise in the deployment of world-class wireless broadband networks.

>> Mobile cellular is the most popular and widespread personal technology on the planet, with an estimated 4.6 billion subscriptions >>

8 AFRICA TELECOMS December 09 / January 2010

Global

mobile advertising network Google was flexing its financial muscle again, dipping into its beer money to buy mobile advertising network Admob for $750m. Admob serves display ads on mobile sites and in applications - a complement to Google’s mobile search ad offering - and the acquisition represents further fortification of Google’s mobile garrison.

According to Google, the deal will bring new innovation and competition to the nascent mobile advertising market, and will lead to more effective tools for creating, serving, and analysing emerging mobile advertising formats.

For Admob, meanwhile, the deal is proof of concept and, apparently, the end to a niggling inferiority complex. Omar Hamoui, founder and chief executive of AdMob said: “Until now, it has always felt like those of us involved in this space played

second fiddle to our online brethren.

I believe that time is over.” Now that Admob is playing with the big boys, Hamoui predicted that: “Our ads will become more relevant, our products more robust, and our monetization capabilities more significant.”

So it’s happy days at Admob, whose entire team will move to Google.

Hamoui was spreading the love in Apple’s direction as well, praising the iPhone creator for effectively jump-starting the in-application advertising business (by effectively jump-starting the mobile application business) Apple itself was living the high life this week, with Strategy Analytics reporting that the firm overtook Nokia to become the world’s most profitable handset vendor in the third quarter of this year. The Finnish market leader, whose margins were long the envy of the handset manufacturing sector, dropped to second place in the wake of the economic downturn and, said Strategy Analytics, “a stagnant presence in the United States.”

New concept phone Google confirmed in a blog that it was testing a new concept mobile phone, writing that it was "dogfooding" the devices, an expression that comes from the idea that companies should eat their own dog food, or use their own products. "We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities, and we shared this device with Google employees across the globe. This means they get to test out a new technology and help improve it," Google wrote. The company declined to disclose any product details and said it would discuss the product more after the test period. Google began distributing new phones to employees on 12 December, who began posting comments to Twitter about them, TechCrunch reported. Some of the employees referred to the devices as the new "Google phone". A Google employee said the phone was made by HTC and runs a new version of Android.

The touch-screen device has no keyboard and appears to be a slightly larger and thinner version of the HTC MyTouch. People familiar with the matter told the Wall Street Journal that Google could start selling phones direct to consumers as early as next year. The paper's sources said the phone is called the Nexus One and was designed inside Google.

It will be sold online, at least initially, without being subsidized by a mobile operator. Google has kept at least two carriers, Verizon Wireless and T-Mobile USA, informed about its new phone, and left open the possibility of distribution with an operator, according to the paper.

>> Mobile broadband subscriptions overtook fixed broadband subscribers in 2008, highlighting the huge potential for the mobile Internet. >>

December 09 / January 2010 AFRICA TELECOMS 9

Global TeliaSonera and Altimo merge their telecoms assets Nordic operator TeliaSonera and Russian conglomerate Altimo (formerly known as the Alfa Group) were playing happy families this week, agreeing to combine their telecoms assets in Turkey and Russia.

The move will end years of corporate disputes over ownership of the assets, and will see the two firms pool their interests in Turkcell and MegaFon into a new company.

According to the two firms, the deal will create an international operator with over 90 million subscribers in Russia, Turkey and the CIS countries. But the agreement also serves to simplify ownership of the Turkish and Russian carriers and avoid further bickering between TeliaSonera and Altimo.

The new company will own a majority of the shares in both Turkcell and Megafon. AF Telecom, the third major shareholder in Megafon, is also invited to join the partnership. Provided AF Telecom joins, TeliaSonera and the Russian investors will have similar ownership and equal influence over the new company.

None of the major shareholders will be able to acquire control over the new company other than by consent of the other major shareholders.

The board will include independent board members, who will be able to resolve any deadlocks, if board members nominated by one of the major shareholders have a different opinion to the others.

The ownership of Turkcell has been subject to legal disputes since the former controlling shareholder, Çukurova, effectively sold the same interest twice, first to TeliaSonera and then to Altimo.

TeliaSonera and Altimo have agreed to collaborate to resolve all legal disputes between them and Çukurova Group, with the intention that Altimo acquires Çukurova Group’s indirect shareholding in Turkcell and contributes those shares to the new company without any premium.

Last month Telenor and Altimo ended years of legal disputes with a plan to combine their common assets in Russia and Ukraine. The two companies have reached an agreement to combine their holdings in second-placed Russian operator VimpelCom and Ukrainian player Kyivstar into a new jointly-owned mobile telecoms operator, VimpelCom Ltd.

Vodafone breaks into Taiwan Vodafone, the world’s largest operator in terms of revenues, struck a deal with Chunghwa Telecom on Thursday, bringing the Big Red brand to the Taiwanese market.

Under one of its non-equity partner market agreements, Chunghwa gains exclusive access to a range of products, services and devices from Vodafone to offer to its Taiwanese customers. Meanwhile, Vodafone customers will be able to access ‘home’ services within Taiwan.

Chunghwa will also draw on Vodafone’s experience in supply chain management, technology development, the acquisition of enterprise customers as well as improved interworking between networks. The move increases Vodafone’s presence in Asia, where it already has agreements in place with China Mobile, SmarTone in Hong Kong, M1 in Singapore, Celcom in Malaysia, Dialog in Sri Lanka, dtac in Thailand, SoftBank in Japan, and Vodafone Fiji.

>> In 2009, more than a quarter of the world’s population are using the Internet. >>

10 AFRICA TELECOMS December 09 / January 2010

Global Con ne cti

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two on billi

Analyst forecasts indicate that around two billion more mobile subscribers will be added to the global market by 2013, with rural customers in emerging markets accounting for a majority of this growth.

As mobile operators in these regions struggle to profitably expand their networks into remote areas, there is evidence of a trend towards the use of satellite networks to cost-effectively backhaul voice and data traffic, as well as a shift toward an all-IP network infrastructure to achieve greater operational efficiencies.

Industry analyst Informa, which published a research paper commissioned by satellite-based IP technology firm iDirect, found that operators are realising the advantages of Time Division Multiple Access (TDMA) satellite networks as an alternative to microwave towers, Single Channel Per Carrier (SCPC) satellite connectivity and other conventional forms of mobile backhaul. The research reveals that TDMA networks enable operators to reduce operating costs by allocating shared satellite capacity across multiple

remote sites, with operators implementing IP-based backhaul networks realising bandwidth savings of up to 40 percent.

According to Informa estimates around 58 per cent of operators worldwide currently deploy satellite backhaul technology, and 80 per cent plan to expand their basestation sites further into remote areas in the next five years, with TDMA-based infrastructure accounting for the majority of growth.

Moreover, 83 per cent of carriers have begun implementing IP technology, with major benefits listed including offering internet access, supporting a broad variety of mobile data services and creating a single unified network to lower operating costs, minimize technical complexity and increase network efficiency. “Both remote and rural areas present a huge opportunity for mobile operators. TDMA backhaul is giving mobile operators a tool to cost effectively reach new subscribers, expand coverage and maintain organic growth beyond urban areas,� Informa said.

>> The 20 largest cable and telephone companies added a net 887,000 high-speed Internet subscribers in Q2 2008 >>

December 09 / January 2010 AFRICA TELECOMS 11

Global ITU's call to Copenhagen ITU's call to Copenhagen: ICTs must be part of the solution ITU SecretaryGeneral Dr Hamadoun Touré urges COP15 delegates to look to the enormous potential of high-tech solutions to cut emissions across all sectors . Geneva, 4 December 2009 - Ahead of his arrival in Copenhagen for the United Nations Climate Change Conference (December 7-18), ITU Secretary-General Dr Hamadoun Touré made an urgent plea to COP15 delegates not to miss the opportunity of harnessing advanced technologies to dramatically reduce emissions across a wide range of industry sectors. ITU wants COP15 delegates to include specific mention of ICTs in key areas of the negotiating text. Specific mention of the ICT sector, along with the adoption of an agreed methodology for measuring the carbon footprint of ICT equipment and its inclusion in National Adaptation/Mitigation Plans, would provide an incentive to the ICT industry to invest in developing countries, help reduce the digital divide, and at the same time help fight climate change - a win-win scenario.

Motorola and du Implement Mobile WiMAX Network for Dubai Metro Motorola, Inc. has announced its Home & Networks Mobility business has joined forces with UAE telecom provider, du, in the successful launch of Dubai Metro’s mobile WiMAX network.

Motorola’s WiMAX equipment provides mobile connectivity and effective backhaul for Wi-Fi traffic on the Dubai Metro transport system train carriages as well as in the Metro stations.

The Dubai Metro will be the longest fully automated rail transport system in the world. The Red Line, which is 52km long, is already functional and is expected to be followed by the Green line in early 2010. Once completed, the Metro will have 47 stations, four of which will be underground. With the implementation of Motorola’s WiMAX network, du offers its customers wireless internet access whilst travelling on the metro at

speeds of up to 90km/hr using PDAs or laptops via Wi-Fi services. “Offering city-wide internet access on the Dubai Metro is part of ongoing efforts to ensure our customers enjoy the convenience of

“This project reaffirms Motorola’s long standing reputation for undertaking major technology advancements and working with leading organizations,” exceptional connectivity, on-demand, wherever they travel. We are delighted to partner with industry-leader Motorola on this initiative to provide a first-rate WiMAX network which benefits the thousands of commuters using the Dubai Metro,” said Hatem Bamatraf, Senior

Vice President, Network Development, du. The WiMAX deployment is the first truly mobile WiMAX network in the UAE. “This project reaffirms Motorola’s longstanding reputation for undertaking major technology advancements and working with leading organizations,” said Ali Amer, vice president, Middle East, Africa and Pakistan, Motorola Home & Networks Mobility. “With our WiMAX technology, du will provide its customers with high-speed wireless service and all the benefits of real-time information-exchange on the go.”

The Dubai Metro WiMAX initiative is part of Motorola’s strategy to provide world class WiMAX technologies, solutions, and services to leading regional and global telecom operators.

The deployment of the network included network design, installation

>> On average the British spend 7 hours 9 minutes a day watching TV, on the phone, using the internet or using other telecom services. >>

12 AFRICA TELECOMS December 09 / January 2010

Global

and optimization. The Motorola WiMAX equipment ensures peak performance of nomadic data services to mobile customers across the Dubai Metro system. Motorola is a global leader in WiMAX technology and has shipped over 10,000 3-sector and 4-sector access points and more than one million CPEs and USB broadband modems.The integrated telecom service provider in the UAE, launched mobile telecommunication services in February 2007 across the UAE, in addition to internet and pay TV services that du provides in some of the free zones of Dubai. Call Select, du's nationwide fixed line services for voice telephony, was launched in July 2007. By the end of 2008, over 3 million people in the UAE chose to become du customers.

Among du’s many firsts is its historic

Number Booking Campaign for both individuals and business, Pay by the Second billing system, Mobile TV, Mobile Payments, first of its kind ‘WoW’ recharge card (which offers customers the choice between more credit, more time and now ‘more international’ recharge option with additional credit on international calls) and Self Care.

For business customers, du business offers include Closed Business User Group and preferred International Destinations. du Broadcast Services division brings scalable media technology platforms and telecommunication solutions to the broadcast community through its world class teleport (Samacom) and Master

Control Room (MCR) facilities. du products and services for consumers and business are available through du’s retail network, currently numbering 33 du shops located in strategic locations across the UAE, more than 3000 authorized dealers. du was presented with an award for Best Middle Eastern Local Currency Deal 2008 by UK’s EuroWeek.

>> 9 7% of MySpace users, 97% of Facebook users, and 65% of LinkedIn users stay in touch with their friends on social networks >>

December 09 / January 2010 AFRICA TELECOMS 13

Global The road to the first cellphone call

by JesĂşs DĂ­az

Marconi puts Tesla wireless Pheidippides ran from communications discoveries Marathon to Athens to into practice, develops transmit the news of the commercial radio. victory over the Persians. Signal was really bad back then: he died 1895 on the spot after delivering the message, Plutarch said.

Reginald Aubrey Fessenden demonstrates first wireless radio telephone.

1906

1926

Radio telephony starts to be used in the First Class of the Hamburg - Berlin train line.

490 BC

First fully automatic mobile phone Bell Laboratories Bell Labs proposes hexagonal (Mobiltelefonisystem A or MTA) system cells for mobile phones, with the three launched in Sweden by Ericsson. Each handset was 90 pounds (40kg.) sided antenna we know today. It sucked, 1956 because it was all theoretical.

1940

1947

1908 First US Patent on a wireless phone awarded to Nathan B. Stubblefield.

1950

1930 1939 World War II starts.

Germans start using radio phones on a larger scale.

1945 Germany surrenders.

Hitler kills himself, he never used a Windows Mobile Phone, (or Playstation 3 or a HD DVD player.)

1876 First successful telephone transmission.

Graham Bell says "Mr. Watson, come here, I want to see you" and Watson understands each word clearly. A century later, people would be "What? Say that again?"

1954 Linus Larrabee (Humphrey Bogart) uses a real mobile phone from his car in Billy Wilder's Sabrina (played by Audrey Hepburn.)

Mobinil selects its SMS Router Comviva, the leading provider of integrated VAS solutions for mobile operators in emerging markets, today announced that Mobinil, Egypt's largest GSM operator with over 21 million subscribers, has selected its SMS Router solution to enhance SMS traffic delivery across its network.

Comviva's SMS Router will embed a new class of message intelligence into Mobinil's network to improve handling of high throughput requirements, optimize delivery, load-share and integrate existing SMSCs more efficiently.

With SMS Router, all SMSCs across the

network become one virtual SMS processing platform, enabling Mobinil to reduce the burden on some SMSCs and exploit latent SMS processing power elsewhere - resulting in a huge gain in message handling capacity.

Commenting on the alliance, Tarek Fouad Abd El Latif, Manager, Messaging Service platforms, Mobinil, said "With SMS and MMS message traffic enjoying continued strong growth, we needed a proven solution to manage the increased load without requiring major investment.

We selected Comviva's SMS Router to efficiently route traffic over our existing

14 AFRICA TELECOMS December 09 / January 2010

network infrastructure - and deliver an improved level of service to our customers creating greater satisfaction and long-term loyalty."

Speaking on the occasion, Manoranjan Mohapatra, CEO, Comviva said, "Comviva's suite of messaging solutions constantly evolves to meet the changing needs of our service provider partners. SMS Router enables seamless scaling of capacity and is fully redundant, supporting operators' 99.999% requirements. Comviva deploys a combination of innovative features to enhance the network's message-handling

1960

Global April 3, 1973: Motorola's Dr. Martin Cooper calls Joel Engel, head of research at AT&T Bell Labs, while walking in New York City using the first Motorola DynaTAC prototype. The beginning of 1G networks.

1973

Nokia introduces their first cellphone, the analog Mobira Senator. FCC approves the analog-based Advanced Mobile Phone Service (AMPS) and assigns frequencies in the 824-894 MHz band.

Bell Laboratories Automatic "call handoff" system is invented, allowing mobile phones to move through several cell areas during a single 1970 conversation without loss of conversation.

GPRS and EDGE technologies for faster (but not really fast) data transfers, launch.

It's 2.5G.3G networks are not available yet.

First commercial GSM call in the world. Done using Nokia hardware. 2G and digital begins.

1991

1982

2003

Motorola StarTAC 1996

1980 1965 Ericsson's MTB is launched.

This time, the handset is just 20 pounds (9kg.) thanks to the use of transistors.

1978 Bell launches first trial commercial cellular network in Chicago

MTB shuts down, still with 600 clients.

1993 1990 FCC approves the digital AMPS, the beginning of the end for analog networks.

1971 ARP, the first successful commercial cellphone network, is launched in Finland.

You couldn't move from cell to cell seamlessly. It was 0G (Zero G.)

performance, delivering between 60% and 70% of text messages on the first attempt."

"We are very pleased to be partnering Mobinil, one of the region's most dynamic operators, to deliver new and compelling value added services to the mobile community. Having achieved success with deployments of messaging solutions across the globe, we are confident of adding value to Mobinil's services in the Middle East region with our SMS Router solution," added Sabri

October 13, 1983 First call ever made with a commercially available cellphone, a Motorola DynaTAC.

FCC decides to shut down the analog network 2002

February 19, 2008: Cellphone analog networks shut down

2008

2000 3G appears.

txt msgng apprs 4 1st time LOL

2007 iPhone launches. Still runs on 2.5G technology, but adds Wi-Fi for data transfer. 3G cellphones start to become ubiquitous.

Amireh, VP, Middle East & North Africa, Comviva.

Present in the MENA region for over 8 years, Comviva has deployed solutions for more than 35 mobile operators in the region - consolidating its position as a market leader in the value added solution space.

Comviva's solutions reach 130 million subscribers across the Middle East and North Africa and over 500 million subscribers globally.

December 09 / January 2010 AFRICA TELECOMS 15

Back«Chat

readers comment on our previous issue

FNB Cellphone banking – Sharing some of our lessons learnt

By Yolande van wyk, FNB Not long ago mobile banking was a service barely used

by South Africans. Beginning in 2001, most large South African banks launched versions of mobile banking. These services had very little support, and most of them were not successful. At the beginning of 2005 hardly anyone used mobile banking and the service’s future was uncertain and in dispute. Local South African banks were not really active in this arena and there was little international interest in these types of services.

In 2009, mobile banking became the largest electronic channel for two of South Africa's largest banks. Both ABSA and FNB have reported over a million customers each.

It cannot be disputed that mobile banking and mobile payments are changing the face of financial services, not just in South Africa, but across the globe. Though various different models have been launched, FNB has been seen as an industry leader in the launch of a bank-led mobile banking service.

FNB pioneered the mobile financial services with their account notification service InContact, and in December 2008 FNB sent a record 67 million SMS messages to their customers. Launching FNB Cellphone banking in 2005, FNB successfully grew the service and in February 2009, 45,000 new customers started using the full Cellphone Banking service At the end of February 2009 FNB had 1.29 million customers registered, processing close to 4 million transactions through their various interactive Cellphone Banking services, worth R600 million. Success like this doesn’t come easy, and we had to learn some very hard lessons during the lifecycle of our products and services.

What key lessons have we learnt?

1) Technology alone cannot guarantee success. It is easy to fall into the trap where mobile technology is seen as the key differentiator to a good mobile banking offering. Many debates are held about the type of technology to choose,

yet we forget that having the technology is only the first step. You can have the best technology available, yet if the offering is not underpinned by good product design, efficient and customer-friendly processes and a team of people to support the full customer experience, all that capital investment will be wasted. It is these three “P’s” (Product, Process, and People) that create a good solution, and not just technology.

2) Good product design is crucial. Good mobile user interface design has increased tremendously in the last couple of years. It is important to apply the best user interface design and information architecture possible.

Keep it simple, and ensure the functionality matches the need of the target market.

A tough lesson we had to learn at FNB was the fact that if a customer cannot use our service once, they will not return.

This also applies to the registration process. With every barrier to entry placed before a customer, you can expect a drop in potential customers. We also learnt that every market is unique. After implementing our mobile banking solution in various African countries, we learnt that each market responds differently, and product design has to take that into account.

3) The needs of the market will dictate the choice of technology. One of mobile telephony’s key strengths has been the various technology choices on offer to communicate with customers. Starting with basic SMS, we quickly move on to the ubiquitous USSD, and into the packet switched world of mobile internet on GPRS or 3G. Handset based applications such as J2ME, Symbian and STK provides even further options to enrich (or confuse) us.

There is no single technology that is the best for mobile banking. Provide the right product on the right technology for the specific target market segment. In developing markets USSD has proven highly successful as it is supported by all handsets without any complicated downloads, but

16 AFRICA TELECOMS December 09 / January 2010

in developed markets with high penetration of high-end phones, mobile internet-based solutions work better.

Understand the handset and user capabilities of the target market and match it to their needs.

4) Regulation should incubate, not inhibit. It is very motivating to see the number of regulators that are entering the debate around mobile banking and mobile payments. As an accountable institution, FNB fully supports the need to protect against fraud, money laundering risks and credit exposure. On the other hand the industry needs to find a middle ground that mitigates the risks, but allows us to service a segment of the market that could currently be inhibited through onerous regulations in place. The only way to address this is active industry engagement with regulators to create collaborative efforts in solving the challenges.

5) Education. Lastly, we cannot emphasise enough the need to create targeted and effective education of customers.

This relates to product awareness, product education and safety. Industry-wide the advertising spend on mobile banking has increased significantly, and we believe this is the only way that mobile banking can become a de facto transactional standard worldwide. Combined with collaboration and standardisation it could become the most powerful channel for financial transactions in the future.

In conclusion, Mobile Banking has moved from a “first to market” product to a significant transaction channel. Major customer awareness and education campaigns have been undertaken and this is paying off. The success of mobile banking is completely dependent on the ability of industry players to create strong collaborative relationships that benefit the industry as a whole. This includes the banks, the mobile operators and the regulators. We can apply the technologies and product designs that we can, but without ongoing conversations between all stakeholders, it cannot develop into the leading service we believe it can be. AT

Back«Chat readers comment on our previous issue

opportunities and challenges for mobile money transfer in africa By manish gupta, vice president of Global marketing, Kabira technologies Africa is proving to be the perfect environment for not only testing new telecommunications technologies and services, but also for establishing new business models in a scaled setting. 4G technologies like WiMAX are leveraging Africa to showcase unique value proposition in large commercial deployments. Mobile Money Transfer (MMT), similarly, is quickly becoming an area where several countries across Africa are aggressively rolling out services to subscribers eager for reliable and easy to access financial infrastructure. Nearly one hundred services have been launched and close to thirty percent of global MMT users reside in Africa and Middle East. This region also represents approximately 20% of global money transferred using MMT (source: Juniper Research October 2009).

Mobile Money Transfer represents a substantial business opportunity for Operators across Africa.

Given that MMT lies at the intersection of mobile communications and financial services, execution

of a successful business in this space can be very challenging. These Operators need to ensure they can adopt appropriate system level IT approaches. Here are some examples of the readjustment of the mind set required for success: • Reliability: How many calls does a network drop? One in a thousand? One in ten thousand? But if an Operator drops even one in ten thousand MMT transactions they would be throwing away a certain amount of subscriber’s money every minute. Not a good way to keep or maintain customer satisfaction.

• Transactionality: Revenue leakage varies from network to network, but 3% is not unusual. Subscribers don’t tend to complain when Operators forget to charge them for a call. But if 3% of the time an Operator loses an MMT transaction – then they will not only have angry subscribers, but accounting problems and potentially

some legal issues.

• Scalability: It is unlikely that the system which is trialed with a dozen subscribers will scale up to thousands of transactions per second - and that is exactly the kind of scale Operators in Africa must plan for. How does an Operator start with a small budget but ensure that they can grow with subscriber increase?

• Security: With MMT, Operators are faced with an entirely new level of security expectations. Encryption, audit trails, and virus-proof systems are required.

• Regulation: MMT services are impacted by ever changing regulations from the financial services as well as telecommunications sectors. Operators must ensure their systems are flexible enough to handle asyet-unknown rules and regulations, without having to rip-and-replace.

“We have seen many of these challenges faced by our customers across Africa,” states Manish Gupta, vice president of global marketing for Kabira Technologies.

“Kabira has installations in fourteen countries in Africa, and without exception, these customers have deployed the Kabira solution to ensure long term scalability, zero downtime, high performance and maximum business flexibility.”

To benefit from this fast growing opportunity, Operators must prepare for the challenges and ensure that systems and procedures are in place for risk mitigation and optimum benefit. AT

18 AFRICA TELECOMS December 09 / January 2010

THOUGHT LEADERSHIP

Harald Braun has an imposing CV that he has brought to bear at Harris Stratex Networks within the brief time he has been with the company as president and CEO. Such is the magnitude of his influence that he was named International Telecom CEO of the Year 2009 by IT & Telecom Digest.

Harald Braun

by JOHANN BARNARD

S

omewhat aptly, Braun's award was announced at the Eighth Nigerian Information Technology & Telecom Awards held in Lagos during November 2009. The reason this is so apt is that more than a third of the company's revenue is generated in Africa, which it claims places it as the only global telecommunications company to generate such a significant chunk of income on the continent. By contrast, the largest share of its revenue is generated in the North American market, which contributes 37%.

Braun has directed the company's path since he joined in April 2008, drawing on his vast experience in the telecoms industry that spans serving as a senior executive at Nokia Siemens Networks North America and president and CEO of Siemens Networks in North America, where he established the company in the next-generation telecoms marketplace in North America.

He has extensive experience in developing next-generation solutions, having led Siemens Carrier Networks Division as well as positioning Siemens Ltd in Thailand as a leading nextgeneration network provider.

Harris Stratex Networks itself has undergone a phenomenal transformation over the past three years, sparked initially by the merger in 2007 of Stratex Networks and Harris Corporation to create the largest independent provider of wireless broadband network solutions.

Since then, and specifically since Braun joined, the company has moved aggressively to entrench itself as a leading and trusted provider of next-generation 4G networks.

22 AFRICA TELECOMS December 09 / January 2010

"Some countries are skipping 3G and going straight to Wimax"

LEAD STORY

December 09November / January 2009 2010 AFRICA AFRICATELECOMS TELECOMS 23 2

Above: Harald Braun and the Harris Stratex team at the opening ceremony of the Nigerian Office.

And it is exactly in this sphere that Harris Stratex sees tremendous potential on the continent for its technologies and solutions that are designed to address the fairly unique challenges of infrastructure constraints and vast distances separating developed settlements.

Changes in the past year to the company structure have gone a long way to strengthening its position, while laying the platform for the future. The most significant change was the decision in the first quarter of 2009 to become fully independent by disposing of its majority stake in Harris Corporation that resulted from the merger.

“There is no question that the future of broadband wireless communications presents us with significant growth opportunities,” Braun said at the time. “Coupled with the significant progress we have made across our business, we believe that our ability to strengthen our position in this market space and execute on our strategy is now enhanced as an independent company.”

Coupled with this move, the company acquired Telsima Corporation, a leading developer and provider of WiMAX Forum Certified products for use in next-generation broadband wireless networks that fulfills its ability to provide end-to-end 4G network solutions.

“We set about changing the strategy of the company that included forming a new team, who all come from the IT industry, so we now have a very strong and experienced team,” Braun said in an interview for this article. “Harris Stratex Networks was very much a one-trick pony in that it only had one product line, which was the IP mobile backhaul play.”

He adds that 4G was identified as the way forward, which led to the Telsima acquisition, thereby closing the loop so that the company can provide that “end-to-end play”.

24 AFRICA TELECOMS December 09 / January 2010

Another important, and recent, development is the partnership with Juniper Networks that resulted in Harris Stratex developing a wireless services gateway platform that extends its customers’ mobile networks to 4G and beyond.

The gateway was developed using the Juniper Networks’ Partner Solution Development Platform and is capable of fully supporting 4G and WiMAX access, with its roadmap including support for LTE. It's on the back of offering this technology and ability to emerging markets with their unique challenges that Harris Stratex has made its name in places such as Africa, India and Latin America.

Africa, in particular, is a key market for the company, not only because of its physical size, but especially for the growth potential it holds. Countries in which the company is already active include in Algeria, Ivory Coast, Kenya, Nigeria, South Africa and Ghana. Some of its major customers in the region

times, though, is in itself a huge success,” counters Braun. include operators such as MTN Group, Vodacom and Zain.

This has emboldened the company to eye growth opportunities Braun says its product portfolio now enables the company to provide systems and technologies to operators in the region that as some of the continent's largest network operators move to enable them to prepare for the expected data explosion, which meet the demand for data services.

Braun says other countries into which it would like to move he says is being spurred by the influx of international pipes such as those markets open up include Ethiopia (the second most as Seacom, WACS and EASSY. “We are very happy that we are in Africa and know how to populous nation in Africa), Sudan and the Democratic Republic do business there,” he says. “We are happy to understand how of the Congo. Looking to the scope for African operators to to do business there, especially as some competitors have adopt 4G networks, Braun says the strategy of these operators is not clear cut. underestimated the market and we didn't.”

Due to the issue of 4G-ready handsets, however, he expects He concedes that voice is by far the greatest proportion of traffic in Africa, but that this will change as connectivity via 3G will still be around for the next three to five years.

“For us at moment, everything in Africa is 2G, not even 3G. these access points filters through to users. And Harris Stratex intends being at the forefront of this by delivering systems that But, if people want, as is being done in India, they are ignoring enable network operators to offer quick and easy access to data 3G networks for now by building 2G networks because it is so much cheaper and skipping 3G to go directly to Wimax. services.

“We are banking on WiMax as it's a bridge between 3G and It is this latent potential that excites him, providing the opportunity to significantly grow revenue as the addressable 4G, and we expect to see them co-exist for a while,” he says.

The adoption of different strategies, technologies and timelines market grows. also raises the question of multi-vendor “Everything we do there is IP-focused, so growth networks and Harris Stratex's positioning in this in IP usage is a fantastic situation for us because it Looking to the will explode. And people will buy smartphones, scope for African field.

“We can't be so arrogant as to say to which will result in an explosion of demand for operators to adopt customers they should use only our product,” data services.” comments Braun. “The number one priority Braun predicts that this revolution is likely to be 4G networks, is standardisation; in the telecommunications manifested within the next 18 to 24 months.

Braun says the network management world it's all about One of Harris Stratex's more recent success strategy of these standards. When applying products together stories relates to the work it has been doing with with another vendor, we can therefore do a network operator Zain in Nigeria, where 98% of operators is not plug-and-play. its backbone is wireless. clear cut.

“The difficulty, however, is in multi-country “We have a very good relationship with Zain and and continent operations for which you have to recently completed a Network Operations Centre for them,” says Braun. “I've also enjoyed working with the have reliable access and connections to those countries.”

Discussing future developments at Harris Stratex and the Nigerian market as I like their business sense and the excitement technologies that will form the basis of future 4G solutions, they exude. That is very powerful.”

This facility is being managed on Zain's behalf by Harris Braun highlights the progress the company has made in Stratex Global Network Services that has more than two decades delivering a true end-to-end solution, from the 4G access points, IP backhaul and core networks to the installation and network of managed network services expertise.

This turnkey project includes NOC design and buildout management services.

Within the next five years, Braun expects to see developments and network process re-engineering and optimisation. Zain's objective is to boost the resilience and robustness of its network, that enable peer-to-peer communications between base stations.

“They are also getting smaller, which has an impact on the enhancing the customer experience and drastically reducing off-loading of demand,” he says. “All companies are thinking operational downtime.

Despite this and numerous other success stories on the about how they can off-load networks, which can only be done continent, the Harris Stratex has had to deal with the impact that via wi-fi at moment.”

Another access point development to watch is the evolution of the global economic crisis had on capex budgets.

Braun says an added factor that was specific to Africa in picocells, while Braun expects to see significant development on the past year was the consolidation talks engaged in by MTN the core network front that will be geared toward increasing the (with Bharti Airtel) and Zain (with numerous suitors) that led speed, content and control. He is confident that Harris Stratex has to revenue in past quarters falling by as much as 50% while the technology, solutions and expertise to meet the challenges of the future – specifically in its area of speciality of bringing next projects were put on hold.

“Managing to hold on to our market share through these tough generation technologies to bear in developing countries. AT

December 09 / January 2010 AFRICA TELECOMS 25

Gadgets

Africa Telecoms looks at some of the latest gadgets and gizmos designed to integrate your work and home life, bringing convergence to a device near you.

Apple iMac

Samsung S8003 Jet

NEED TO KNOW

NEED TO KNOW

Bigger, brighter, higher resolution displays / Fastest iMacs ever

Uses a new 800MHz processor / Touch sensitive screen / Beautiful

running Core 2 Duo, i5 and i7 Intel processors / Generously

3.1” AMOLED screen / Plays DivX movies

provisioned with RAM and hard drive space / Bluetooth wireless keyboard and multi-touch Magic Mouse

Cost: approximately R5,999.95 Rating: HHHH

Cost: 21.5-inch from R13,999.95 / 27-inch from R19,999.95 Rating: HHHHH

Samsung intended the new Jet phone to compete with Apple’s iPhone in terms of its presentation, performance and functionality

The new Apple iMacs are here, and they are unbelievably stunning

and claims it’s “faster than a smartphone” thanks to its leading-edge

There are 21.5-inch and 27-inch variants, both with 16:9 aspect ratio

800MHz processor. This is all well and good, but the phone itself is

screens with bright LED backlighting and a huge 178-degree viewing

far from an iPhone-killer due to some interface and responsiveness

angle thanks to in-plane-switching (IPS) technology. The display

quirks that take some getting used to.

is housed in aluminum and glass bodywork and the back of the

Luckily, the Jet isn’t a terrible phone overall; in fact it has a rather

enclosure is forged from a single piece of aluminum, while the display

large list of features that are sure to appeal. It’s no surprise that the Jet

is edge-to-edge glass. The iMac reduces desktop clutter and has only

boasts a gorgeous 3.1” AMOLED screen that puts out stunning colours

one cable: the power cable. The Bluetooth multi-touch Magic Mouse

and excellent contrast levels. The Jet supports DivX movies and sports

and aluminum keyboard are completely wireless. Resolutions are the

2GB of internal storage (microSD expansion possible) and a 3.5 mm

biggest numbers ever, a generous 1920x1080 for the 21.5-inch and

headphone jack as well as Dolby 5.1 Surround Sound. The built-in

a staggering 2560x1440 for the 27-inch. More pixels mean a better

5MP camera is rather snazzy and connectivity options are extensive

picture and a 1000:1 contrast ratio gives you more flamboyant colours

(3G, HSDPA, GPRS, Bluetooth and even WiFi). The battery life is a

and deeper blacks. These cinematic displays are driven by graphics

respectable 1.5 days even with heavy use. Users receive a 24-month

adaptors that are more than equal to the task, and it’s clear that these

free subscription to Garmaps Mapping and a handy car-mount kit for

are the fastest iMacs ever. The iMacs have more ports, connectors and

hands-free navigation purposes included with the phone.

inputs than you could ever hope to use.

26 AFRICA TELECOMS December 09 / January 2010

Navigon 3300 Max

LiveScribe Pulse SmartPen

NEED TO KNOW

NEED TO KNOW

4.3” touchscreen / Multi-destination trip planning / Real-time spoken

Rechargeable digital pen / Take notes or draw by hand, upload to

traffic updates / 3 months free safety camera updates

a PC / Records audio while you write notes / Plays back audio from note-taking sessions

COST: approximately R1,599.95 Rating: HHHH

COST: approximately R1,999.95 Rating: HHH

Much of the stress of commuting is reduced with this easy-to-use and responsive satellite navigation device. Keep your eyes on the road

The Pulse SmartPen from LiveScribe is a new digital pen that takes

with spoken directions and street names.

note-taking to the next level by including the ability to record audio,

MyRoute routing is brilliant, slightly quicker than competing devices and gives you three route selection options to choose from, and an estimated traveling time for each option.

Sync this device with your PC and save all your contacts’ addresses on your device for your convenience. All sensitive data is PIN-

while capturing your notes on its paper with thousands of tiny microdots.

This proprietary paper also has various icons on it, which the pen can identify and use to activate functions. Start recording, stop recording, start playback and more using these icons.

protected. Choose between 2-D and 3-D views, day and night modes.

The SmartPen has 1GB of flash memory, used to store your

Reduce traffic headaches with features like ‘Reality View’ and ‘Exit

documents and to store audio that goes along with them. The

and Lane Assistant Pro’ to ensure you never miss a turn-off again. The

Smartpen has the ability to record audio from your surrounding

SmartSpeller feature makes the entry and search process much easier,

environment as you’re taking notes and to play back audio from

with less clicks. The usual Latest Maps Guaranteed promises are made

any point on the document the pen is touched to. Livescribe’s Pulse

and backed up by a free map upgrade within 30 days of activating

Smartpen is a very cool 21st Century gadget that will transform how

your unit. The Navigon 3300 Max comes with the usual fare of region

you take and make use of handwritten notes. It’s not without its flaws,

map materials, car charger and car holder and a USB cable.

proprietary microdotted paper being the worst offender followed by

As a competitor to already-established brands, its solid feature list and reasonable price mean this device is definitely worth a closer look.

a lack of OCR conversion software in the box, but its concept is solid and its execution laudable.

December 09 / January 2010 AFRICA TELECOMS 27

GADGETS

Sony Vaio VGN-SR56 NEED TO KNOW

Iomega Prestige 1TB Hard Drive

Aimed at business users / Powerful hardware / Sleek design NEED TO KNOW Cost: approximately R20,999.95

1000GB of storage / Sturdy, stainless steel covering /

Rating: HHHHH

USB connectivity

The new Vaio VGN-SR56 notebook is an impressive piece of

Cost: approximately R1,899.95

engineering that business users with high expectations would do

Rating: HHHH

well to investigate. It’s lightweight, solidly built and powerful. The SR56 is driven by a Core 2 Duo P8700 processor running at 2.53GHz,

Iomega has brought out another removable hard drive, this time

which is among the most powerful CPUs to ever grace a notebook’s

boasting a whopping 1000GB of storage (better known as a Terabyte).

insides. The SR56 tears through applications with ease, which makes

This is an enormous amount of space, allowing you to store an

multitasking easy to maintain without impacting heavily on system

impressive number of songs, movies, TV episodes or whatever else

performance.

is currently cluttering your hard drive. At an average of 700MB per

The SR56 also runs Windows 7 Professional 64-bit and Sony has

movie, 4MB per song and 350MB per TV episode, that is an amazing

opted for ATI’s excellent Radeon HD4570 mobile graphics processor

1428 movies, 250000 songs and 2857 TV shows. In anyone’s books,

that has 512MB of dedicated video memory; you can play even the

that’s a LOT of media. Using it couldn’t really be any simpler: plug it in,

most recent games on this notebook at medium to high settings. This

connect it to your PC and start using it. If you’re a Mac user you’ll need

is a surprise for a laptop aimed at business users, but Sony possibly

to format it, but this is a quick process. The default file system is NTFS,

believes in the old “all work and no play” adage. Kudos, Sony!

which can accommodate files bigger than 4GB in size. Our only real

Rounding out the SR56’s very impressive feature list is wired and

gripe with the Prestige drive is that it uses USB 2.0 to connect to your

wireless networking support, a fast 320GB 7200rpm hard drive and a

computer. USB 2.0 is a good standard; however for the amount of data

DVD drive with both reading and writing capabilities.

the Prestige is capable of storing we imagine a much-faster Firewire 400 or 800 connection would have been a far more practical inclusion.

Apart from that, this is a solid product from Iomega.

28 AFRICA TELECOMS December 09 / January 2010

GADGETS

Solar Power for your Electronic Devices

Kindle DX Wireless Reading Device

NEED TO KNOW

NEED TO KNOW

Sunlight isn’t essential / Internal lightweight battery

Holds up to 3,500 books, periodicals, and documents / Auto-Rotating Screen / Built-In PDF Reader

COST: approximately R300 Rating: HHHHH

COST: approximately R3,600 Rating: HHHH

It seems like there are a whole raft of solar charging devices being launched in Africa aimed at all types of people - those who want

Sleek&Trim Kindle DX is as thin as most magazines.

to reduce their carbon footprint, those who live in places where

Beautiful Large Display Kindle DX’s large display is ideal for a broad

electricity is scarce or non-existent or those who like venturing into

range of reading material, including graphic-rich books, PDFs,

the bush but want to be able to keep in touch. This month we have

newspapers, magazines, and blogs.

been testing the equipment of Suntrica. Suntrica’s SolarStrap uses the

Whether you’re reading the latest bestseller or a financial report,

sun to charge its battery but can also be charged via USB or the mains.

text and images are amazingly sharp on the 9.7” screen. Auto-Rotating

In fact, sunlight isn’t essential as the device still charges – albeit at a

Screen By simply turning the device, you can immediately see full-

slower rate – in any daylight. An internal lightweight battery stores

width landscape views of maps, graphs, tables and Web pages.

the energy for instant or later usage. Your phone is connected using

Kindle DX has an easy-to-use 5-way controller, enabling precise

a power adapter - a wide range of adapters are included. As well as

on-screen navigation for selecting text to highlight or looking up

phones, you can also charge MP3/4 players, GPS receivers, LED lights

words. Simple to Use, No Computer Required Kindle DX is completely

and digital cameras. The charger weighs just 60g and can withstand

wireless and ready to use right out of the box--no setup, no cables,

rough handling. Its solar panel is flexible unlike most rival solar

no computer required. Long Battery Life - Read for Days Without

chargers – and the whole thing is weather and waterproof. It can be

Recharging With Kindle DX’s long battery life.

left on a window sill or attached using its velcro strips to a bag, a belt, the handlebars of a bike or even a t-shirt.

December 09 / January 2010 AFRICA TELECOMS 29

getting connected the us navy helps repair a telecoms beacon in the atlantic off the west african coast.

30 AFRICA TELECOMS December 09 / January 2010

FEATURE

VoIP Me! resistance to the introduction of Voip on the African continent is showing signs of weakening, but many countries still resist due to self interest.

by ken wieland

December 09 / January 2010 AFRICA TELECOMS 31

Africa is slowly beginning to accept retail VoIP. True, there is still a long list of countries on the continent that ban consumers and businesses from using voice over IP – usually because state-owned operators fear their lucrative international call revenue would be eroded if it were allowed – but equally there is a growing number of countries that have made it legal over the last few years.

In North Africa,

Algeria, Egypt, Morocco and Tunisia permit VoIP. In Sub-Saharan Africa, countries that have given the green light to retail VoIP include Angola, Botswana, Burkina Faso, Cape Verde, Gabon, Ghana, Kenya, Nigeria, Tanzania, Somalia, South Africa, Uganda and Zimbabwe.

Where VoIP is legal, however, there is usually no specific regulation. “VoIP is still very much an unregulated segment, particularly in sub-Saharan Africa,” says Thecla Mbongue, a senior research analyst at Informa Telecoms & Media, a research and consulting firm.

In one way, the absence of a specific regulatory framework for VoIP could be a sign of a progressive regulator. With technology

32 AFRICA TELECOMS December 09 / January 2010

developing all the time, simply allowing competing operators to offer a voice service – whether it is delivered over VoIP or not – looks to be a sensible and pragmatic way of opening up the market to competition and promoting cheaper voice calls. There is no need to re-visit licensing legislation when technology moves on.

“In Tanzania, the regulator doesn’t have any plans to specifically regulate VoIP or issue VoIP licences for the simple reason that – like many other sub-Saharan African markets – they are moving towards a technology-neutral regulatory framework,” says Mbongue.

Regulatory challenges

The flipside of no specific VoIP regulation is that there can be ambiguity about what is allowed and what is not. This can cause confusion in the market and might even frighten off foreign investors.

“There are some countries in Africa that are keen to show they are very progressive on VoIP, but when you read the small print it is very difficult to determine whether VoIP is in fact allowed,” says Phillippa Biggs, an ITU economist who tracks the VoIP markets worldwide.

One example of VoIP confusion has been in Morocco, says Biggs, where the regulator (ANRT) has issued a lot of detail surrounding the use of VoIP but there is still wide scope for different interpretation on the exact circumstances where VoIP can be used legally.

Looking at sub-Saharan Africa from a broad regulatory perspective, Biggs says the region can be split roughly into two segments: the former British colonies in East Africa and the former French colonies in West Africa. Under the British definition of law, if something is not explicitly stated as being legal then it is presumed to be illegal. Under the French definition of law, the opposite is true – if something is not explicitly stated as being illegal then it is presumed to be legal. “These are two very different regulatory philosophies,” says Biggs, “and the

VoIP solutions are flexible, scalable and cost-effective replacements for legacy switched telephony solutions

problem is how to interpret where VoIP stands within those two frameworks.”

Adding to the potential for confusion is that a lot of telecom regulation on the continent is outdated, which, although not a unique phenomena to Africa, threatens to dampen enthusiasm among foreign investors who are eying up the African markets.

“When looking at African telecom regulation, a lot of the time IP networks aren’t even mentioned and so there is a lack of clarity,” continues Biggs. “For new service providers who want to offer new services, whether they can or not often depends on their approach and who is in charge of them. It is not necessarily anything to do with existing legislation.”

With no specific regulatory framework in place for VoIP, the thorny issue remains of coming up with IP interconnect agreements between the VoIP providers and incumbent operators.

In the likely event that discussions on these matters will not be resolved to the satisfaction of both parties without any thirdparty mediator, regulatory intervention will be required.

Russell Southwood, an independent telecoms consultant

specialising in coverage of the African providers are now offering calls to mobile, national and local numbers at lower rates than the incumbents. “These rates are likely to fall even further as a result of regulatory interventions in the interconnect environment,” he adds.

With a VoIP solution, a single broadband telephone line can be used to provision several VoIP lines, each with its own telephone number, which allows for “dramatic cost-savings” according to Massel. Companies can also avoid the expense of buying a PBX (private branch exchange) through using standards-based software and hardware, or even opting for a hosted VoIP solution that can be rented on a monthly basis from the service provider.

Helping VoIP take off in South Africa, notes Massel, is that VoIP operators now have access to geographic number ranges, which means customers no longer need to dial a special prefix before calling. As from next year, Massel expects that geographic number portability will come into effect – customers will then be able to change providers yet still keep their numbers.

“VoIP solutions are flexible, scalable and cost-effective

December 09 / January 2010 AFRICA TELECOMS 33

replacements for legacy switched telephony solutions,” says Massel. “The variety and affordability of the services available on the market today from ISPA’s members is testimony to how a more deregulated and equitable telecom environment promotes choice and lower costs for South Africa’s telecom users.”

Other African countries are making VoIP strides. Teledata, for example, a Ghana-based ISP, announced in November 2009 that it will be offering VoIP solutions for its business customers.

Using VoIP equipment from VocalTec Communications, an Israeli company, Teledata says it will be able to add value to its existing PBX hosting services. Among the additional features brought about by VoIP are click-to-dial, attendant console and auto-attendant. Ghana, however, has still to permit retail VoIP for consumers.

There are no such limitations in Uganda where a technologyneutral framework is in place. VoIP is regarded as simply a voice service and licensed operators are free to use it. And this is exactly what Smile Telecom is doing. A South African and Saudi Arabian owned consortium with headquarters in South Africa, Smile Telecom claimed it was the first ever VoIP provider to use WiMAX in Africa after launching its service in Uganda in early November 2009. The service reportedly operates in the same way as Skype in that phone communication over the internet is free except when calling a mobile phone or landline.

Informa’s Mbongue says that a France Telecom subsidiary in Mali is also using a WiMAX network to offer voice and data services (and has around 1,000 VoIP customers). Africa

Telecoms was not able to confirm this at the time of going to press.

And in Zimbabwe, according to local reports, VoIP has made recent headway. Eight VoIP companies were granted licences in September 2009 to operate international VoIP telephony services (although regulations dictate that the licensees must be at least 51% Zimbabwean-owned). Until this latest round of licensing, companies were restricted to providing domestic IP-based services as international VoIP calls were previously banned. Zimbabwe’s regulatory authorities, according to local reports, say that no more VoIP licences will be awarded as the market is now “saturated”.

“VoIP, or IP networks as a whole, offer – or can offer – significant competitive advantage as it takes the cost of service provision down between a quarter to a third of the PSTN,” notes Biggs. “There are significant cost savings to be had.”

UNLIMITED VOIP IN COTE D'IVOIRE »

other African countries, including ADSL with up to 8Mbps. Moreover, the expected arrival of more international fibre-optic submarine cables to the west region in 2010 and 2011 is expected to lead to significantly lower prices for international bandwidth. Currently there is only one cable – SAT-3/WASC – that serves West Africa.

In East Africa, the landing of the Seacom cable in Kenya in July 2009 marked the first time that fibre-based international bandwidth has been available in the entire region. More and cheaper international bandwidth in Africa will help to push VoIP prices down still further.

Ivory Coast embraces VoIP

Two of the country’s leading ISPs, Aviso and AfNet (controlled by France Telecom and South Africa’s MTN respectively) are offering flat rates for unlimited VoIP calls to certain destinations, including North America, Europe and China. Buckets of minutes are also available for calls to India, Japan and Australia.

“This development is remarkable, since broadband services in general are still relatively expensive in Cote d’Ivoire,” says Peter Lange, a senior analyst at Paul Budde Communications, a research and consulting firm. “The two international telecom giants are working to integrate their fixed, mobile and broadband/internet operations in Cote d’Ivoire more closely in a bid to transform themselves into true converged service providers.”

CI-Telecom – the fixed-line incumbent in Cote d’Ivoire – was privatised as far back as 1997 when France Telecom bought a controlling stake. Notably, there has been no fierce resistance to VoIP from the incumbent. Now, through its Aviso subsidiary, France Telecom is aggressively supporting it.

According to Paul Budde Communications, Cote d’Ivoire has become West Africa’s third largest internet market after Nigeria and Ghana, with services superior to those in many

34 AFRICA TELECOMS December 09 / January 2010

VoIP blackout

Despite the growing number of VoIP bright spots in Africa, large swathes of the continent are still suffering a VoIP blackout.

According to statistics gathered by ITU, of the 49 countries that don’t yet permit VoIP worldwide nearly half of them can be found in sub-Saharan Africa. ITU figures reveal that 24 countries in sub-Sahara Africa have banned VoIP. Moreover, of the some 200 million VoIP subscribers worldwide today (an estimate from IDATE, a France-based consultancy) Africa

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Africa, with much lower incomes, has to pay some of the highest international calling rates in the world

doesn’t even register on pie charts that depict the regional distribution of VoIP subscribers.

According to Point Topic, a market research firm, Western Europe (38%), North America (27%) and Asia-Pacific (26%) had bagged the largest regional market shares of VoIP subscribers by end Q1 2009 as countries in these regions have liberalised telecom markets early and issued specific VoIP regulation. Southeastern Asia (5%), Latin America (3%) and Eastern Europe are the VoIP subscriber laggards in the Point Topic survey. No mention of Africa.

A survey of registered subscribers clearly does not include unregistered users that are using VoIP as an ‘over the top’ service across broadband connections. This could make some difference to Africa’s slice of the VoIP usage pie (by individuals and businesses), but probably not by much as there is still a dearth of broadband access availability on the continent (a minimum 56Kbps link is required to use VoIP). According to figures from ITU, there is only one fixed broadband subscriber for every 1,000 people in Africa; in Europe there are 200 fixed broadband subscribers for every 1,000 people.

“The contrast between Europe and Africa is all the more striking when you consider that average incomes are so much higher in Europe yet people have access to low-cost voice calls through VoIP,” says ITU’s Biggs. “Africa, with much

VOIP turns to grey »

Cost savings a matter of debate Incumbent operators in Africa that do use VoIP technology – which has a cheaper cost base than circuit-switched calls – don’t necessarily pass on those cost-savings to customers. As a result, Paul Budde Communications, a telecom consultancy, estimates at least 10% of international calls in almost every African country are carried by the unlicensed grey market.

The grey market’s appearance is down to the significant price arbitrage opportunity that exists when there is a large difference between the price of retail and wholesale voice calls. In short, unlicensed players buy international wholesale minutes at a low price in one market yet they can still make a reasonable profit margin by substantially undercutting the retail voice call prices in another market (namely in the African countries where incumbents charge high retail prices for voice).

36 AFRICA TELECOMS December 09 / January 2010

lower incomes, has to pay some of the highest international calling rates in the world.”

It might be understandable that some operators resist the introduction of VoIP if it means that customers are able to avoid paying for higher-priced circuit-switched calls. And where incumbents are state-owned, that resistance may well be much stronger. “PSTN revenues can be fantastic for governments in that they are very regular and they are very dependable,” says Biggs. “They are a major source of tax revenue, particularly in countries where the informal economy dominates.”

But to cling on to higher-priced PSTN calls, argues Biggs, is short-term economic thinking.

To attract FDI (foreign direct investment), countries need to offer businesses low-priced VoIP-based international calls and IP VPNs (virtual private networks) – developments that usually arise from liberalising telecom markets and allowing service providers (using IP networks) to compete in the marketplace.

Some island countries off mainland Africa, once heavily dependent on circuit-switched international call revenue, look as if they are beginning to see the bigger economic picture and are starting to wean themselves off their dependency on PSTN revenue. These include Mauritius, which legalised VoIP as far back as 2001; Seychelles, which followed suit in 2005; and

Where VoIP is not permitted in Africa, however, it is generally in countries where ICT infrastructure is sparse, even

by African standards

Madagascar, which, following the liberalisation of the island’s telecom market in June 2008, also allows consumers to make VoIP calls. However, the respective regulator in each island imposes some requirements on VoIP providers: in Mauritius and Seychelles, VoIP providers have to provide emergency access (although they do not have any universal service obligations); in Madagascar, VoIP providers are required to contribute to a universal service fund (as well as provide emergency access).

Given the high level of resistance to VoIP in large parts of Africa, a lot of countries clearly need convincing that VoIP is a step forward. But that does not necessarily mean that government resistance is universal in countries where VoIP is banned. “Sometimes the minister of trade or economy sees what needs to be done, because they want to attract FDI,” says Biggs, “but they can’t always persuade the ministry of communications that VoIP is the way to go, particularly if the incumbent is state-owned.”

Where VoIP is not permitted in Africa, however, it is generally in countries where ICT infrastructure is sparse, even by African standards: Eritrea, Ethiopia, Lesotho, Liberia, Senegal and Swaziland each say no to retail VoIP. “Banning the use of VoIP [in these countries] is really not a major issue yet, but once broadband is rolled out, incumbent operators may well try to block or ban it, as has happened in some Middle Eastern countries,” says Kalyan Medapati, a research analyst at Informa Telecoms & Media. “This will require a response from the regulator.”

If the poorer nations of Africa are to attract foreign investment and boost their economies, then a liberal response to VoIP may well have to be the answer. AT

international VOIP minutes on the rise »

Global calls a major factor

From a starting point of zero in 1997, VoIP accounted for about a quarter of all global international call traffic by 2008. This is according to Telegeography, a market research firm, which calculates there were 94.8 billion international VoIP call minutes during 2008 compared with around 300 billion international call minutes using TDM (time division multiplexing) technology. The rise in international VoIP traffic is not directly related to the rise in retail VoIP, however. To realise bandwidth efficiencies, operators are converting more and more circuit-switched (TDM) calls to IP over fibre-optic backbones. In Ghana, for example, the incumbent uses an IP backbone to transmit international calls but retail VoIP is not permitted for consumers. Yet, the Telegeography figures probably understate the ratio of VoIP to TDM international traffic quite substantially as they do not include PC-to-PC traffic and private corporate networks. “If these two items were included, the proportion of international VoIP traffic could be around a half,” says Phillippa Biggs, an economist with the ITU.

38 AFRICA TELECOMS December 09 / January 2010

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2009 Year in Review

By LESLEY STONES

For the telecoms industry, 2009 was largely a year of empty promises, false starts, some political meddling and finally a few belated achievements. Many companies assessed numerous growth opportunities, but the enthusiastic expansion plans of previous years were noticeably tempered by the economic slump. Yet a few deals went down and some operators made further inroads into Africa. The highlight was the launch of the Seacom cable, which should make 2010 altogether more memorable as bandwidth finally becomes cheaper and more abundant. Here is a summary of some major events in a year where the focus was on financial prudence rather than fireworks:

42 AFRICA TELECOMS December 09 / January 2010

The economic slump gripping first world countries comes creeping across the oceans, with analysts warning that investments in Africa’s telecoms sector will diminish as global financiers get the jitters and shy away from anything vaguely risky or involving unknown territories.

“Investments related to costly projects such as acquisitions will feel this drop intensely,” said Frost & Sullivan analyst Saverio Romeo. How right he was.

Meanwhile, Nigerian company Multi-Links begins to pose a headache for South Africa’s fixed line operator Telkom. Telkom starts to discover all is not well with the Nigerian company after paying $130 million to acquire the final 25% it did not already own. Subscriber growth for Multi-Links’ fixed and mobile voice and data services was surging. Yet later in the year Telkom was forced to impair R2.1 billion on its purchase and declared that turning around Multi-Links was its most pressing and most painful headache.

January

March February

Swanky cellphone users finally get their hands on the BlackBerry Storm as Vodacom and Research In Motion (RIM) launch the latest smartphone in South Africa.

The stylish handset boasts a unique SurePress touch-screen, which depresses a fraction to make typing and navigation easier by giving users an experience they can actually feel.

A built-in “accelerometer” automatically switches the display for landscape or portrait mode as the user rotates the handset. Since the Storm is designed for the most demanding customers, other features include HSDPA network support, a camera, advanced multimedia services, and a Bluetooth link to play its music on your home stereo. An integrated global positioning system lets you find an address and plan the route on a 3D map, with audio directions. And if you absolutely insist, you can even make an old fashioned phone-call…..

Another type of storm erupted when the Independent Communications Authority of South Africa (Icasa) proposed new licence fees that would cost operators 3% of their total revenues just for the right to operate. In other countries, the fee is about 0,5%. Amid a wave of protest, Icasa capitulated and set the fee at 1,5% of gross profit.

Orange launches its GSM network in Uganda. The move makes Uganda the 15th African country for Orange, but makes Orange the fifth operator in the highly-competitive Ugandan market.

The launch of Orange Uganda follows the acquisition of a 53% stake in the Ugandan operator Hits Telecom in 2008. Orange promises wider coverage and 3G broadband services in the next few months. With a rapidly growing population of around 30 million people and a mobile penetration rate of less than 27%, Uganda offers major prospects for growth, Orange says.

Other players have become less optimistic, questioning Uganda’s policy of issuing numerous telecoms licences and looking to claw back spectrum from existing players to make sure newcomers have some spectrum to play with.

On the subject of bandwidth, the consortium rolling the Seacom undersea cable towards Africa’s east coast announces that Neotel has become its anchor tenant. Neotel, a South African player majority owned by India’s Tata Communications, also wins a contract to manage the cable, its billing systems and customer relationships.

December 09 / January 2010 AFRICA TELECOMS 43

Stock-market punters are all a-quiver at the imminent listing of Vodacom on May 18. This is the final step to end an unworkable ménage a trois where the mobile operator and its joint shareholders Telkom and the British operator Vodafone constantly clash over their strategies.

Telkom finally agreed to bow out, selling 15% of its stake to Vodafone for roughly R21 billion. Its other 35% is to be listed on Johannesburg Stock Exchange, with the shares going to Telkom’s existing shareholders who are then free to sell them on the open market. The entire plan almost comes crashing down just three days ahead of the debut, when Icasa backtracks on an earlier decision that it does not need to approve the change of ownership.

Icasa belatedly agrees to support a protest by Cosatu, the Congress of South African Trade Unions, and declares that the listing cannot proceed until public hearings are staged. Panic ensures. Lawyers work late into the night to figure out if Icasa actually has the power to sabotage the deal. The showdown comes in an emergency court hearing on the Sunday, when a judge throws out an application to halt the listing. Amid his reasons, the judge cites a threat to the country’s economic stability and its reputation among foreign investors, and the possible destabilising of the rand. Fifteen hours later Vodacom lists, and the entire industry parties.

April

June May

Plans to bring even more bandwidth to Africa inch closer when a consortium of operators signs contracts for the supply, construction and maintenance of the West Africa Cable System (WACS).

The 3.84 terabit-per-second cable will link southern and western Africa to Europe with landing points in South Africa, Namibia, Angola, the Democratic Republic of the Congo, the Republic of Congo, Canary Islands, Cameroon, Nigeria, Togo, Ghana, Cote d'Ivoire, Cape Verde, Portugal and the United Kingdom. Landings stations in Namibia, the Democratic Republic of the Congo, the Republic of Congo and Togo will give these countries their first submarine connectivity.

The $600-million project is backed by operators including Vodacom, MTN, Angola Telecom, Cable & Wireless, Telecom Namibia, Neotel, Portugal Telecom and Togo Telecom.

Alcatel-Lucent is supplying the 14,000km long cable, which should be ready for service by early 2011. Only another year to wait then…..

44 AFRICA TELECOMS December 09 / January 2010

The will-they-won’t they game begins again as MTN, active in 21 countries, is embroiled in merger talks with India’s Bharti Airtel. Déjà vu, as similar talks had collapsed a year earlier. It never becomes exactly clear who will be doing what to whom, with a complex $23 billion cash and share-swop planned and neither side admitting they will emerge as the underdog. Many analysts fail to see any sense or value in a deal, but this courtship is set to run and run.

Another story still waiting for fruition is the promise of yet more undersea bandwidth, with news that the Africa Coast to Europe (ACE) submarine system stretching between Gabon to France will be extended. The latest plan is to connect every country along the west coast from Morocco to South Africa.

ACE will provide broadband connectivity to more than 25 countries in Africa and Europe.

Three more operators - Mauritano-Tunisienne des Télécommunications, Camtel and Companhia Santomense de Telecomunicações - join the original 14, who first signed a memorandum of understanding in November 2008. The 14,000 km cable could be switched on in 2011. If all these cable plans materialise, Africa’s seabeds will eventually be abuzz with bandwidth.

The highlight of Africa’s telecoms year is the switching on of Seacom. The 17,000km cable links several east African countries to India and Europe at speeds of 1.28 terabytes. In layman’s terms, the average home internet user in South Africa downloads 1Gb of data a month, and Seacom can download 160Gb per second. CEO Brian Herlihy hails Seacom as an unprecedented opportunity for operators, corporate customers and governments to capitalise on bandwidth at a fraction of the previous prices. Originally he expected to slash prices by 80%, but the mere threat of Seacom prompted other suppliers to cut their fees in anticipation. Even so, Herlihy believes Seacom is substantially cheaper. Bandwidth buyers say that hasn’t happened to the expected degree, as Seacom sells to wholesalers, who can choose how much of the saving to pass on to consumers. July is also memorable for Kuwait-listed MTC, which finally confesses there is some truth to the rumour that its considering shedding the pan-African operations of its cellular subsidiary Zain. MTC originally denied any such scheme existed, until the French conglomerate Vivendi declares that the talks are off. Which confirms that talks had indeed been on. MTC says it has received expressions of interest from several operators to acquire Zain Africa and is considering their proposals. Zain Africa operates in 16 countries and accounts for about 65% of the group’s customers, yet suffered a net loss in the first quarter of the year.

Politicians make their voices heard in a long-running battle over the cost of cross-network calls in South Africa. The peak-rate interconnection fee of R1.25 a minute inflates the cost of a call way beyond the actual amount that it costs to link a call from one network to another, and is a direct contributor to the country’s high call fees.

Smaller industry players as well as consumers have been complaining for years, but Icasa has failed to force down the fees despite conducting numerous studies and public hearings. Studies suggest the actual cost of linking a call could be 40c, and some players say 25c at most, but none of the operators are willing to admit how little it actually costs.

The issue expodes in parliament when the communications committee demands that the fee be more than halved to 60c a minute by November 1.

MPs slate the fees as “exorbitant and excessive” and believe that industry collusion has allowed the fees to remain at levels that are “socially indefensible and economically unjustifiable.” Stirring stuff indeed.

July

September August Another month, another round of MTN and Bharti discussions. The largest operator in Africa and the largest in India extend their exclusive talks, triggering speculation that only nitty-gritty wrangling over the financial terms remains. Bharti wants to buy 49% of MTN and MTN plans to buy 36% of Bharti, leading to more debate among analysts about who the deal favours.

Bharti is estimated to be worth $33 billion and MTN $30 billion, but with stock markets in a state of flux, pinning down their respective values, never mind their potential future values, proves tricky.

And it all turns out to be academic. After months of intense and costly negotiations the deal falls apart in October, as government regulations in both countries present hurdles the operators cannot overcome.

Nobody in Africa seems disappointed, prompting comments that MTN ‘s executives were so committed to the deal that they forgot to take into consideration what shareholders actually wanted.

December 09 / January 2010 AFRICA TELECOMS 45

Zain awards a five-year contract to Nokia Siemens Networks to modernise its networks and streamline its operations in Kenya, Tanzania and Uganda to improve the quality and increase efficiency. The deal is the first mobile network outsourcing contract in East Africa and involves more than 3,000 sites serving 9-million customers. Nokia Siemens Networks will also implement energy efficiency technologies to reduce operating costs and power consumption.

The downside for Zain staff is that 350 employees are transferred to Nokia Siemens Networks. Zain Africa CEO Chris Gabriel says that employees initially objected, until they realised that working for a specialist contractor gives them new opportunities for technology training and international work experience.

Gabriel also predicts that many other operators will follow this outsourcing trend to save money and increase their efficiency, once they realise that running a network is not a core competency, but owning the customer is.

October

December November

What starts with a bang ends with a whimper, as pressure on South African operators is deflected by their clever move to announce interconnection rate cuts of their own. Hardly voluntary, since Communications Minister Siphiwe Nyanda has made it clear that the law will be amended to force down their fees if they do not it themselves.

In a neat move, MTN and Vodacom declare they will drop their interconnection fees by 19%, bringing the peak rate down to 89c. And not by November, as MPs initially demanded, but in the first quarter of 2010.

Cell C, the country’s smallest network, breaks ranks by denouncing the proposed cuts as “cosmetic tweaking” rather than any substantial savings for consumers. Given that MPs demanded a cut to 60c, consensus is that they have got away lightly. Yet the Minister declares it an early Christmas present for consumers – providing that the operators actually cut their retail fees in line with these cuts to the wholesale rates they charge each other. Smooth operators indeed.

46 AFRICA TELECOMS December 09 / January 2010

Millicom officially starts its mobile operations in Rwanda. Rwandans now have a choice of three mobile operators, although Millicom so far covers only 50% of the population, with plans to extend its coverage significantly over the next three years.

Back on the bandwidth front, the ACE submarine cable system welcomes six new members: Etisalat Nigeria, Expresso Telecom Group (Mauritania, Senegal, Ghana, Nigeria), Globalink (Sierra Leone), Mauritius Telecom, Office Congolais de Poste et Télécommunication (Democratic Republic of Congo) and Sierratel (Sierra Leone). The new members reinforce its feasibility and demonstrate that its strategy is attractive to African operators as an effective way to meet their international bandwidth needs, the consortium says.

Baharicom Development Company has joined ACE as a major partner to jointly build the ACE system. Baharicom will then work with philanthropic organisations to establish a fund to provide capacity grants for health, education, development programs and charities throughout Africa.

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Edwin Thompson General Manager: Infrastructure and Technology MTN Business

Google SMS to serve needs of poor in

UGANDA

By Rachel Payne, Country Manager, Uganda

48 AFRICA TELECOMS December 09 / January 2010

m a e t a ng i c t i i r c f x A e le n n g a e o s e o e w c G et un b o p n i n e a sh h r t e , n a t d par N Ugan oundation e MT meen F , and th gle e Gra l o g o o G o and nch of G nda. lau S in Uga SM

December 09 / January 2010 AFRICA TELECOMS 49

Today is a big day for the Google Africa team for several reasons. We're announcing an exciting partnership between MTN Uganda, the Grameen Foundation and Google, and the launch of Google SMS in Uganda.

This launch makes available the first suite of applications resulting from an endeavor initiated by Grameen Foundation, called "AppLab" (Application Laboratory), which began over a year ago. AppLab is designed to develop mobile applications that serve the needs of poor and other vulnerable individuals and communities, most of whom have limited access to information and communications technology.

We seek to serve a broad base of people -- not only those who can afford to access the Internet from the convenience of their workplace or with a computer at home. We believe it's important to

reach users wherever they are, with the information they need most, and in areas with the greatest information poverty. So today, we announce the launch of Google SMS, a bundle of mobile services that allow users to access content on a range of topics.

This not only includes traditional services such as sports scores and local news, but for the first time, also includes services such as health and agriculture tips. We are also launching Google Trader, a SMS-based "marketplace" application that helps buyers and sellers find each other, enabling greater access to markets and trade, especially for those who are most excluded today. With these services, we hope to help alleviate some of the information and access to markets barriers for the poor, especially those in rural areas. So, when farmers in Iganga want to sell their maize, they can list

50 AFRICA TELECOMS December 09 / January 2010

their crop on Google Trader and a miller in another trading center can find and contact them to buy their goods.

If a pregnant woman has a question about prenatal services, she can text her question to 6001 and get a response right away. Now people in any part of Uganda can easily find the information that is most critical to them.

Miller in trading center calling women's farming group in Iganga to obtain maize.

This launch also represents an important milestone, as our first major initiative in Uganda, one of the newest locations where Google is setting up operations.

We believe it's important to reach users wherever they are, with the information they need most, and in areas with the greatest information poverty.

Earlier this year, I joined the Google Africa team to lead our efforts in Uganda.

Like other countries in Africa where Google is starting to work, we want to reach a new set of users in Uganda and provide valuable services that address their needs. As the East African fiber optic cables begin to connect Uganda to the global Internet community, it is vital that the foundation for a thriving Internet economy also be established. Many impressive organizations are focused on this goal, and we hope to enhance these efforts as much as possible. Finally, this launch represents the team efforts of many local partners, communities and individuals, each of whom played a role in bringing this vision to life. The Village Phone Operators represent our very first set of focus group participants and product development advisors. And the participation of farmers in more distant villages was fundamental in creating the highly local content – created by them, for them, through our local partner BROSDI (Busoga Rural Open Source and Development Initiative),

in collaboration with AppLab. While developing the health tips service, students, health workers, doctors and school nurses stepped forward as leaders in their respective areas and turned this humble mission into a reality. Our partners, Straight Talk Foundation and Marie Stopes International not only created the content with AppLab, based on the input of these many constituents, but forged deep, strong links with the

Now people in any part of Uganda can easily find the information that is most critical to them. communities where these services are in greatest demand. When we return to these villages with the product that was developed through their insights, we intend to understand whether the service truly is having an impact. To this end, we are conducting a social impact assessment with Innovations for Poverty Action,

with support from Google.org, to build from the knowledge of what users need most, to understand what works best. We hope these services will help a variety of organizations already doing impressive work to reach a broader audience and those with the greatest need, in new and innovative ways, through the mobile phone. This is the first of many exciting, collaborative efforts we will be working on to support access to information in Uganda and more broadly, across Africa.

So to everyone who participated in this effort, we say Webale Nyo! AT

cyber attacks Some argue that targeted cyber attacks and acts of cyber terrorism may be oversensationalised, but with real-life incidents occuring regularly can we afford to ignore it?

Es t o

USA

& S ou

July 4, 2009 a paralysing barrage of electronic cyber attacks was unleashed upon government computers and networks in the US and South Korea, underscoring the growth in assaults against vital state infrastructure.

It utilised a variety of well-known distributed denial of service (DDoS) attacks that try to overwhelm Websites with useless requests and make them unavailable for legitimate users.

th Korea

nia 2007, criminals bombarded the country’s internet servers until they crashed. The cyber attacks paralysed networks of Estonian government, police, ministries, banks and media. To counter the attack, Estonia was forced to disconnect from the internet, causing large-scale disruption to its economy. Today, Estonia is in a leadership position in the fight against cyberterrorism.

52 AFRICA TELECOMS December 09 / January 2010

around the world

J ap

Au

lf Early in 2008, undersea communication cables were inexplicably cut. Sudden disruptions on internet connectivity affected countries that included Egypt, United Arab Emirates, Saudi Arabia, Qatar, India, Pakistan and Bangladesh chalked up millions of dollars in lost revenue.

In Japan, some of the 24 million users of DoCoMo’s i-mode mobile phones had their handsets taken over by a malicious programming code delivered by email. The code directed the phone to dial 110 - Japan’a emergency hotline number. The mass numbers of phones dialling the emergency number caused the system to shut down.

alia str

an

Gu ian

Per s

A disgruntled. unsuccessful job applicant to a waste management plant in Queensland sabotaged the plant’s computerised sewage along Australa’s Sunshine Coast, killing marine life and spilling into local rivers. May 2008, a hacker hacked in and shut down several government databases in Darwin including servers for the Health Department, hospital, prison and Supreme Court, deleting the accounts of 10,475 public servants.

December 09 / January 2010 AFRICA TELECOMS 53

W

e live in a world that has become used to spectacular and daring acts of conventional terrorism. But, as with the world around us, terrorism, and the threat it poses, is constantly evolving. We understand the power of the bullet and the bomb but now we also face exposure to a new, complex and potentially devastating form of terror: cyber-terrorism.

Increasingly, our societies are becoming wired together beyond national borders through a complex link of information and communication technology (ICT) networks and systems Utilising the same links that bind us together globally, a new generation of terrorists is able to strike from virtually anywhere in the world, causing catastrophic social and economic harm to countries thousands of kilometres away And due to their decentralised nature, these attacks are difficult to detect via traditional detection methods alone. A co-ordinated and

sustained cyber attack against Estonia in March 2007 crippled banking and governmental ICT systems, disrupting the lives of its citizens. Which is why it is essential for governments worldwide do more than ensure our physical security. !ere is an absolute need to come together

Todays terrorist may be able to do more with a keyboard than with a bomb. Do we have protection? and share the information and resources that will guarantee our cyber security.

Governments cannot contain the threatof cyber-terrorism by domestic measures alone. Without expert collaboration and knowledge sharing individual countries lessen their ability to respond to cyber attacks, as well as exposing

54 AFRICA TELECOMS December 09 / January 2010

other countries to even greater risks as cyber terrorists learn to exploit nations’ ICT weaknesses one-by-one. No single government possesses all the expertise to counter cyber-terrorism.

The talent pool of experts needed to meet disparate threats is dispersed across the globe, and in most instances, it is to be found in the private sector and academia rather than in government hands.

The ability to respond quickly to contain and learn from cyber attacks is critical if damage is to be limited and the threat to other nations reduced.

However, governments generally hesitate to collaborate with others on security related matters, thus adding to the challenge.

To meet this growing threat headon, Prime Minister Abdullah Badawi of Malaysia launched a new global initiative at World Cyber Security Summit 2008 IMPACT, the International Multilateral Partnership Against Cyber Treats is the first global public-private initiative allowing countries of the

Modelled after the Centers for Disease Control, IMPACT coordinates the resources of government, the academia, private bodies and individuals, to go beyond political borders. world to interact between themselves and the global private sector and academia. Its international advisory board reflects this aim and comprises a distinguished set of globally renowned experts from industry and academia. As a non-profit organisation, IMPACT is strategically positioned as a politically neutral platform to foster collaborative partnerships between governments of the world, the industry and academia.

IMPACT acts as the forum that enables all member countries to collectively take a global leadership role in the interest of their national cyber security.

Inspired by the Centers for Disease Control and Prevention (CDC), IMPACT seeks to offer the global community the best brains and the best facilities to complement the nations of the world to counter cyber threats. IMPACT is inclusive in its outlook and will actively pursue joint efforts with other public,

private and academic organisations that share similar core objectives of protecting and defending against the common threats of cyber threats.

Many ICT systems - in both the public and private sector - face daily threats from hackers and their bots - networks of zombie computers millions strong, bombarding scanning and probing their websites with the aim of exploiting the vulnerable ones. For the most part, the probes come from criminal groups intent on stealing identities, credit details, passwords and other information they can turn to financial gain. As well as groups of so-called ‘black hats’ trying to break in simply for the thrill and kudos of breaching multi-million dollar security networks. But as the coordinated attack on Estonia’s cyber infrastructure in March 2007 showed these same skills can be used for political purposes, to create a breakdown in a country’s social

and economic fabric. !at attack proved very publicly that cyber-terrorism is neither a game, nor a hoax, and that these nightmare scenarios are a very real threat.

As Estonia’s experience showed, we are all at risk from cyber-terrorism. Even for those of us who have never so much as touched a mouse or keyboard. It could be something as simple as disabling the banking networks, halting ATM withdrawals and credit card payments.

Or manipulating the stock markets and causing banks and other institutions to fail, taking jobs, pensions and savings with them.

In an address at the e-Crime Congress in London in March 2008 Suleyman Anil, Head of NATO’s Computer Incident Response Capability Co-Ordination Centre, stated that “Cyber defence is now mentioned at the highest level along with missile defence and energy security.

December 09 / January 2010 AFRICA TELECOMS 55

We have seen more of these attacks and we don’t think this problem will disappear soon.”

With dozens of international bodies and organisations jostling for position and power in the cyber security sector, the problems of legal jurisdiction and national interest are boundless. A US$2bn attempt by the US Air Force to set up a definitive national task force called Cyber Command was abruptly suspended in September 2008. According to a report, “the command’s emerging leaders couldn’t agree on what exactly the new unit would do. Some said the command’s mission would be the “protection and defense of the Air Force’s command and control abilities.” Others argued that the “mission is to control cyberspace both for attacks and defense.” Some believed the Cyber Command would only be responsible for computer networks. Others thought it’d be responsible for every system that had anything to do with the electromagnetic spectrum - up to and including laser weapons.” (Air Force Suspends Controversial Cyber Command, Wired, August 2008) Yet, as systems and software become ever more complex and connected, allowing hackers to breach so-called ‘soft targets’ and find a back door into more crucial and secure systems, the race to find a coordinating body becomes ever more desperate, and the need to cooperate across borders and jurisdictions increases. AT

IMPACT Chairman Mohamed Noor Amin (above) has called for governments around the world to set up dedicated agencies to address the growing dangers of cyber threats. He argues that the adoption of this approach by both developed and developing countries is the most targeted and therefore likely to be the most effective in combating cyber attacks that threaten the well-being of a country’s information and communications technology infrastructure.

According to the Internet World Stats as of 30 June 2009, Asia Pacific boasted 42.2 % of the world’s Internet usage, Africa hosted 3.9 % and the Middle east laid claim to 2.9 %

the Centre for Global Response Fashioned after the famous Center for Disease Control & Prevention (CDC) in Atlanta, IMPACT acts as the foremost cyber threat resource centre for the global community complete with an emergency response centre to facilitate swift identification and sharing of available resources to assist membergovernments during emergencies.

With a comprehensive database of leading experts from govenments, industry and the academia, IMPACT’s Global Response Centre is able to act as a ‘one-stop’ coordination and response centre for countries during emergencies - allowing for swift identification and sharing of available resources across borders.

The Global Response Centre’s role also includes establishing a comprehensive Early Warning System for the benefit of all member-countries and providing proactive protection across the globe.

December 09 / January 2010 AFRICA TELECOMS 57

Harnessing

TELECOMS operations as a development engine

by LESLIE PEaN

T

he fiscal crisis of the State is hitting everyone and is particularly affecting social sectors in developing countries. Education facilities are not operating, as there is less money to pay teachers and to buy supplies. Clinics and hospitals lack some of the basic drugs needed to cure patients. Fresh water is not available for household uses such as drinking, bathing and cooking. This situation is even dire for agricultural and industrial uses. Declining revenues and increasing expenditures together make a grim outlook for governments to be able to supply some of the basic services needed by their populations.

The constraints laid down by the international financial institutions on the public finance policies of developing countries limiting their budget deficit impedes their capacity to finance the expenditures to meet growing basic needs. The ripple effects of the international financial crisis are affecting from private direct investments in developing countries as well as international aid and non-government organizations (NGOs).

The Telecommunications industry can help governments and nations to redress this balance, and help generate considerable revenue through Telecoms.

58 AFRICA TELECOMS December 09 / January 2010

The development aid crunch

Development aid has been shrinking in recent times. The unintended consequence of the world financial crisis has been to modify the dynamics of development aid. According to a 2009 World Bank study, “ developing countries face a financing gap of $270-$700 billion depending on the severity of the economic and financial crisis and the strength and timing of policy responses.

Even at the lower end of this range, existing resources of international financial institutions would appear inadequate to meet financing needs this year. Should a more pessimistic outcome occur, unmet financing needs will be enormous.” Diminishing diaspora remittances provided a breathing space for households but growing unemployment and reducing purchasing power of the consumers led to the diminution of the value-added tax (VAT) and income taxes leading to revenue loss for the State.

In the last twenty years, under pressure from globalization forces, developing countries switched their tax base from “easy to collect taxes” such as tariffs and seigniorage toward “hard to collect taxes” like VAT and income taxes. The erosion of the tax base stemming from that switch has been further aggravated by the economic downturn complicating matters and affecting even more negatively the revenue/GDP ratio. In order to redress imbalances, governments are increasingly looking at one of the effects of globalization, i.e. increasing incoming telephone traffic stemming from their migrants abroad as a way to increase their revenues.

The sharp drop in foreign aid compels governments to look for other sources of income to reckon with the shortfall in development aid. A way for compensating for the negative fiscal shock of globalisation is to review tariffs on incoming international calls within the parameters recommended by the International Telecommunication Union (ITU).

Developing countries and Information Communications Technology (ICT).

In the era of the information-based economy, Information and Communication Technology (ICT) is the main locomotive pulling other sectors of the economy. ICT offers an opportunity to developing countries to have a positive impact on growth while changing the contours of their public finances. This is particularly the case in Africa where telephone and Internet user penetration are low -- about 25 percent and 5 percent compared to the world average of over 70 percent and 20 percent respectively.

December 09 / January 2010 AFRICA TELECOMS 59

These figures indicate that potential for growth remains huge for both Inbound and Outgoing traffic. However, in certain market segments like in the cellular market, from 2000 to 2007, mobile subscribers increased exponentially from 2 million to over 150 million.

Technological changes give to the regulators, inter alia, the capacity for constant monitoring and enforcing operators’ compliance with regulations, and resolving disputes.

Connectivity is considered the main tool to reach people in remote areas to provide them with health and education benefits but also with market information and financial services. For every category of services i.e., fixed, mobile, Internet, broadband, the growth effect of telecommunications is higher in developing (low and medium income) than in developed (high income) countries. According to the Deloitte consultancy, the multiplier impact of GSM mobile units is such that a ten percent increase in a country’s mobile penetration can lead to a 1.2 per cent increase in annual GDP. The increased trade in imported telecommunications services in the forms of calls terminating in African countries has bought an income stream that Governments have not been able to tap into mainly for technical and financial reasons. The main issue is fraud known as bypassing affecting both telecom providers and the Government. According to the U.S.-based Communications Fraud Control Association (CFCA), fraudulent international calls cost operators some USD 55 billion annually.

Legitimate operators are cheated. These underground operators wreck all the interconnection agreements in which the routes and costs of international termination calls on the networks of legitimate operators are determined. Bypassing takes many forms, but for our purpose, the focus is on international bypassing that consists essentially in routing an international call to avoid all the interconnection points where a termination fee is charged.

Since the advent of Voice over International Protocol (VoIP), international bypassing is longer a sophisticated exercise requiring the usage of satellite technology and

expensive investments. Low cost equipment and easy set-up such as a SIM box and/or a GSM Gateway are enough to divert international calls from the official gateway to GSM Gateway. With an internet connection and a VoIP device that is small enough to be hidden in a backpack, it has been calculated that a bypass operator using sixty circuits with 15,000 minutes each can make as much as $70,000 per month. This represents a net loss for the legitimate operators but also for the Government since international calls are diverted and presented to the regulators as local calls. It is also a loss for the consumers. Calls from bypass operators are hard to connect and suffer from an unclear reception.

These calls are indeed cheaper since the bypass operator does not pay service charges and interconnection fees.

The demand of regulators in developing countries is to document on a real time basis the characteristics of the international incoming and outgoing traffic.

They can’t just rely on assumption or declarations of the international carriers. They need to know routes and circuits in order to monitor total number of calls, lost calls, total time per call, the rate used and total revenues. Some service providers offer a monitoring system capable of knowing these variables on a real time basis to fight fraud as well as supplying the technology and the technical assistance needed by the regulator to compile data to be compared with those reported by the international carriers and local operators.

This data is crucial for national authorities in order to correct discrepancies in the traffic matrix of these carriers that do not reflect properly the real and actual traffic behavior monitored by the regulator. It has been the duty of some service providers to assist the regulators in developing enough understanding about technical issues to be able to adequately address these challenges. The regulator will be able to enforce regulation, make efforts to eliminate fraud and avoidance of illegal channels using bypass, thereby reducing revenue lost from the normal carriers and the Government and enhancing their financial health.

For every category of services ie, fixed, mobile, Internet or broadband, the growth of telecommunications is higher in developing countries than in developed countries.

60 AFRICA TELECOMS December 09 / January 2010

The fight against fraud and revenue assurance

With sophisticated CDR technology, regulators can move beyond their antiquated business information system to position themselves in order to help governments play their role in the value chain. With an effective monitoring system, the regulator allows carriers to get paid on time while allowing the instant tracking of the complex telecommunication usage patterns thereby making the market more efficient. The regulator can be flexible with a dual strategy of letting all competitive market segments work by themselves on the one hand while being pro-active in the fraud area that is limiting fair competition on the other.

ICT as a national resource

Several states have made the bold move to look elsewhere for opportunities by switching over to an international service based on a revenue sharing model within the entire value chain of a nation’s telecommunications network increasing revenues for all ligitimate operators at the expense of fraudulent operators. Such change can take effect rather rapidly without changing the legal or regulatory framework and it can be worked out in a way that does not increase the price per minute paid by the local consumer.

While having a short implementation period, such a way of increasing fiscal revenues adds zero collection cost to the country. It is a strategic choice that brings a level of efficiency to the telecom sector while reinforcing the institutional quality of the regulator. In this way, both traffic and nett revenues will significantly increase while diminishing the barriers hindering free and fair competition, and so nations can create a national resource through effective ICT policy and implementation thereof. AT

here are some of the predominant fraud types:

1 Subscription & ID theft: 29% 2 PBX / Voice Mail: 20% 3 Premium Rate Service: 6% 4 Arbitrage: 4% 5 Hacking: 4% 6 Carrier Interconnect: 3% 7 Internet: 3% 8 SIM box: 3% December 09 / January 2010 AFRICA TELECOMS 61

Telecommunications fraud remains the single largest cause of lost revenues for all stakeholders within a telecommunications network. There are many forms of telecoms fraud and of all these forms, it the GSM Gateway or SIMBOX that is rampant across Africa.

Telecoms Fraud – A definition According to the Communications Fraud Control Association, “Communications fraud is the use of telecommunications products or services with no intention of payment. Fraud negatively impacts everyone, including residential and commercial customers. The losses increase the communications operators operating costs. Although Communications operators have increased measures to minimize fraud and reduce their losses, the criminals continue to abuse communications networks and services. Therefore, communications operators tend to keep their actual losses figures and their plans for corrective measures confidential.”

This type of fraud results in the following principle consequences: 1 Loss of revenue 2 Loss of traffic 3 Network corruption 4 Reduction in network capacity 5 Artificially reduce market prices and de-stabilise market prices 6 QoS It is estimated that for Africa this amounts to a loss of over 1 Billion USD per annum. With Africa’s increased connectivity, and huge growth for mobile subscribers, networks and network operators will continue to face considerable obstacles to fight the problem.

The only solution to remedy fraud centres on a concerted effort by all operators and vendors to provide a holistic approach and present a united front against the fraudsters. Worldwide industry experts surveyed in the CFCA survey 2009 now estimate annual global fraud losses to be in the range of $72 - $80 billion (USD) up 34% from the CFCA Survey results of 2005. These fraud losses represent approximately 4.5% of telecom revenues.

“The results of this survey confirm that telecom fraud is a more lucrative criminal business than we initially thought and that the problem is getting worse,” explained John Frost, CCSP, CFCA President. Yet it remains increasingly difficult to put a figure on the losses due to fraud to operators George Bevir of Arabian Business quoted The GSM Association’s Africa Fraud Forum chairman, Ade Banjoko, who agrees that it is difficult to put a figure on it but he estimates the cost to operators in Africa is “well over 30% of profits”.

62 AFRICA TELECOMS December 09 / January 2010

Balancing act at GSR-09 ICT regulators and industry strive to find an optimal path between market intervention and non-intervention at last month’s Global Symposium for Regulators. by ken wieland

November 2009 AFRICA TELECOMS 63

H

undreds of regulators and corporate leaders from around the world converged on Beirut, Lebanon, to attend the ITU’s 9th Global Symposium for Regulators (GSR) on 10-12 November The day before – 9 November – the GILF (Global Industry Leader’s Forum), representing the private ICT sector, laid out their regulatory requirements to encourage investment and spur ICT growth. The results of the GILF meetings, held on the Monday and chaired by Dr Saad Al Barrak, CEO of the Zain Group, were a series of recommendations that were then fed into the regulator-led discussions on Tuesday and Wednesday.

Given the backdrop of the economic crisis, the need for regulators and the private sector to enter into constructive dialogue is all the more pressing if countries in every region of the world – not just Africa – are to maximize their ICT growth potential.

“It is critical to promote dialogue among ICT regulators and market players for both parties to share their experiences, learn from each other and raise their concerns at a global level,” Sami Al-Basheer, director of ITU’s Telecommunications Development Bureau (BDT) , told Africa Telecoms. “This is key to strengthening the foundation of a global information society and spurring growth in the ICT market. It is one of the main reasons for the GILF being organized back-to-back with the GSR.” The theme of GSR-09 was ‘hands on, hands off’, reflecting the delicate balance that regulators need to strike between intervening and letting market forces take their course. The dangers of simply doing nothing, of course, have been starkly exposed by the collapse of the global financial sector. On the other hand, over-zealous regulators – with long lists of rules and requirements – were certainly not welcomed by the GILF at GSR-09. Instead, industry leaders in Beirut called for a ‘light touch’ and ‘smart’ approach to regulation with particular emphasis on promoting technology-neutral regulatory frameworks and as little regulatory meddling as possible.

Mr Al-Basheer believes some common ground was found in Beirut between industry and regulators. “If you look at the outcomes of both the GSR [through its best practice guidelines] and GILF [recommendations], you will see that regulators and the industry may share similar views on the approach to regulation,” he says. “For example, the GILF highlighted that ‘in order to promote investment, regulators need to pursue light-touch regulation, simplified procedures and limited taxation that do not kill the cash-cow’, and that the ‘the industry needs hands-off policy to promote investment in a hands-on manner’.”

He continues: “The regulators, in their best practice guidelines, also recognized the importance of ‘building an adaptive regulatory framework by adopting a technologyneutral approach, an administratively simplified and flexible

64 AFRICA TELECOMS December 09 / January 2010

licensing regime providing for easy market entry of new players, such as through general authorizations and multiservice/ unified licences, and encouraging the roll-out of broadband infrastructure [especially in remote and underserved areas] by providing suitable incentive schemes, such as tax incentives, lower regulatory or spectrum fees, and by facilitating access to rights of way.”

Interestingly, one GSR-09 delegate told Africa Telecoms that many regulators were indeed fully aware of the benefits of having a light touch approach but sometimes it just wasn’t possible to do. “Some of the regulators said that because industry players didn’t always play fair they had no choice but to intervene,” said the delegate.

GSR-09 flashpoints

A key issue at GSR-09 was spectrum. As a finite resource, how spectrum is allocated invariably generates heated debate.

And in Africa, where wireless networks will provide the overwhelming majority of broadband connections, spectrum will be fundamental to ICT and economic growth.

“More spectrum is required and this concern is shared by both regulators and the industry,” says Mr Al-Basher. “Significant amounts of radio spectrum that are expected to be useful for telecommunications purposes are being liberalized through digitalization of TV broadcasting, but discussions on the ‘digital dividend’ at GSR-09 made it clear there are different views and different approaches. This issue is likely to move to the top of the agenda of many countries as they switch from analogue to digital terrestrial television broadcasting.”

Regulators in all parts of the world have had to wrestle with spectrum allocation for broadband services, and in many countries – particularly the big emerging markets of India, Russia and Brazil – there have been long-running disputes among incumbent players, potential new market entrants and the regulator over terms and conditions of how spectrum should be allocated.

Africa has not been immune to spectrum controversy. KDN, a Kenyan WiMAX operator, paid US$25,000 in 2003 for a 2×28MHz spectrum allocation in the 3.5GHz frequency band. Since that time, other WiMAX players – including AccessKenya Group, UUNET Kenya and OneCom – have been awarded spectrum, but none has received an allocation of more than 7MHz. This means that KDN is the only WiMAX operator in the country with sufficient spectrum to deploy a WiMAX network of significant size. Spectrum imbalances of this sort are off-putting for investors.

Another topic raised at GSR-09, largely because of GILF insistence, was USFs (Universal Service Funds). “Funding of universal access and services – and particularly the lack of transparency in the use of USFs – is a concern of the industry,” says Mr Al-Basheer. “Regulators recognized that where available, USFs should be released for network deployment to

underserved areas, in close collaboration with industry.”

Mr Al-Basheer points out other financing mechanisms to promote rural access should be explored. “Strong public effort is needed, but the participation of industry is also essential as universal access is likely to be achieved through public-privatepartnership [PPP],” he says. “BDT is examining universal service and access policies and financial mechanisms though the ITU-D study Group 1 and in work carried out by the Regulatory and Market Environment Division [RME], such as the ICT regulation toolkit.”

Making life more difficult for the regulator is that the old divisions between fixed and mobile telephony, and voice and multimedia, no longer easily apply as operators migrate towards all IP-based, next-generation networks.

Aside from looking at convergence, ITU commissioned a series of papers to spark discussion at GSR-09, which examined different regulatory approaches in different areas, such as consumer protection, interconnection and mobile termination, in order to report on the different experiences and identify best practices One such discussion paper was written by Mandla Msimang, managing director at Pygma Consulting, who calls for public ICT stimulus funding – where it is available – to be done at arm’s length. “NRAs [national regulatory authorities], when they are in charge of implementing stimulus plans, should ensure that pledges of government funding are channelled through PPPs, grants and loans to investors,” she warns. “They should not be construed as efforts to increase the long-term direct involvement of the state in infrastructure rollout. The involvement should be competitively neutral and in no way distort commercial incentives for efficient investment.”

With specific reference to Africa, Msimang said competition should be increased through licensing new entrants and reducing barriers to market entry, specifically in network deployment.

“Countries, such as Equatorial Guinea, have in the last year opened monopoly markets to competition, and Iran and Gabon have recently attracted additional investment by licensing competitive operators in various market segments,” she says.

“Encouraging infrastructure sharing will also support this.”

Taxing times in Africa

Although GSR-09 took a global perspective on regulatory issues, it is in the high levels of taxation on mobile services and equipment in Africa – particularly East Africa – where the continent arguably warrants special regulatory attention. The subject was certainly high on GILF’s agenda at this year’s GSR, as it was the year before.

According to research commissioned by the GSM Association, an organisation that represents GSM operators around the world, there are fewer than 20 countries worldwide that impose an excise tax on mobile airtime usage. (Excise duty is charged in addition to the country’s existing VAT rates for goods and

services, but it is usually reserved for ‘luxury’ items, such as alcohol and tobacco.)

However, of those countries that have taken the unusual step of bracketing mobile services in the luxury category, eight are in Africa: Ghana, Kenya, Malawi, Rwanda, Tanzania, Tunisia, Uganda and Zambia. Of these eight, the East African countries charge the most: Uganda has a 12% excise duty (the highest In Africa), while Kenya and Tanzania each charge 10%.

Rwanda initially introduced a 10% excise duty on mobile airtime in January 2007 but then reduced it to 3% in July 2008.

Rwandan authorities apparently came round to the view that a punitive tax regime on mobile services would do more harm than good for the overall economy by hampering the pace of mobile subscriber take-up.

The GSMA would like to see other East African countries follow Rwanda’s lead. Not only would this increase the profitability of its operator membership, but – and this is what GSMA representatives emphasised at GSR-09 – it would also

December 09 / January 2010 AFRICA TELECOMS 65

make mobile much more affordable to the poorer sections of society. And by stimulating greater mobile usage and attracting more subscribers through cheaper tariffs, a much lower excise duty would – argues GSMA – actually increase tax revenues in the long term.

According to research published by the GSMA late last year based on mobile revenue statistics in East Africa from 2007 and the early part of 2008 – the latest information that GSMA has made publicly available on this subject – Kenya, Tanzania and Uganda would generate substantial increases in tax revenue over a ten-year period (2009-2019) if they reduced their mobile excise duty to 3%. Compared with leaving the excise duty as it is, GSMA says that these three East African countries would enjoy tax revenue increases of anywhere between 4.6% and 10.8% over the 2009-19 period – in a ‘central scenario’ – by making these reductions. In an ‘upside scenario’ the GSMA says those increases could be anywhere between 13.1% and 20.1%.

With mobile penetration rates of around 50% in Uganda and Kenya, and about 35% in Tanzania, there is still plenty of scope for mobile growth in these countries. Yet the full growth potential will only be realised, says GSMA, if services are made more affordable by removing high taxes. GSMA is always keen to highlight an assertion from the Deloitte consultancy that a ten per cent increase in a country’s mobile penetration can lead to a 1.2 per cent increase in annual GDP, but still the East African nations (apart from Rwanda) appear unconvinced.

It is true that Kenya scrapped its 16% VAT on mobile handsets earlier this year but the high excise duty rates still remain in place there, as they do in Tanzania and Uganda. And just a few weeks before the GSR-09 was held in Lebanon, the Ugandan government rejected a proposal by opposition MPs to scrap all mobile-specific taxes.

From the Ugandan government’s point of view, it might seem that high mobile taxes are having no adverse impact on the rate of mobile growth and so there is no need to remove or lower them. Over the last decade the number of mobile subscribers has mushroomed in Uganda from 50,000 to around ten million.

Mobile tax revenues are also substantial. According to local media reports, the Uganda Revenue Authority says that net tax collections from telecommunications companies last year amounted to KES 267 billion (US$3.57 billion), which is 9.5 per cent of the country’s total tax revenue.

“Uganda, along with Tanzania and Kenya, are seeing lots of mobile growth, so the incentive to reduce taxes may not be so apparent,” concedes Gabriel Solomon, a senior vice president at the GSMA. “Mobile looks to be one of the few businesses that are relatively robust and recession-proof because of the obvious need to communicate. Even so, governments [in East Africa] are not necessarily looking at the fact that by lowering taxes, the more marginal parts of society will be able to communicate.

If these countries are serious about having universal service access, they will need to lower taxes on the mobile industry.”

66 AFRICA TELECOMS December 09 / January 2010

Mr Solomon is encouraged that telecom ministries in East Africa are generally in agreement with the GSMA position on tax. “It is the finance ministries that are the big obstacle as they rely so heavily on the mobile industry to deliver their yearly budgets,” he says. “But our analysis shows that a high mobilespecific tax is short-term thinking.”

Such is the apparent doggedness of finance ministries in their position that some have even rejected offers by mobile operators to guarantee their budgeted tax contributions to government coffers if mobile-specific taxes are lowered. This has definitely happened in Tanzania and Kenya, says Mr Solomon. The rejection of these offers, he says, is probably down to finance ministries not being keen on committing to guaranteed minimums, especially when the mobile industry continues to exceed tax revenue expectations on a yearly basis. “It looks as if political pressure for universal access will be required if the [tax] situation is to change,” says Mr Solomon.

One place to apply that pressure is at the GSR events, where industry can discuss these issues directly with regulators. Mr Solomon is encouraged that ITU is sympathetic to GSMA on this issue. “Dr Hamadoun Touré [the ITU secretary-general] is very supportive of the cause to lower mobile-specific and ICT taxation,” he says.

Although GSM has been a roaring success in Africa with mobile penetration, on average, now reaching 40% across the continent, Mr Solomon warns that punitive tax regimes could hinder mobile broadband rollout. The 3G technology that GSMA supports uses the 2.1GHz frequency band, which is about three times more capital intensive than 900MHz GSM systems to cover the same size of geographical area. (The lower the frequency band, the longer the distance a wireless signal can travel without attenuation.) With high rates of tax on equipment and services there is a danger that the business case for mobile broadband might not stack up, argues the GSMA, which would harm a country’s overall economy.

Living in the real world

The main message from GSR-09 seems to be that governments and industry will both need to be pragmatic if they are to move forward together. “The chairman of GILF-09, Mr Saad Al Barrak, stressed that optimal regulation is no regulation, but, as he added, we don’t live in this ideal world,” says Mr Al-Basheer.

“Light touch regulation may be recommended in some cases but heavier regulation may be necessary depending on the reforms taken in the sector and the maturity and level of development of the markets as each country follows a different path.”

Even so, Mr Al-Basheer stresses the market changes that have taken place recently in the ICT sector – led by the convergence of networks, advent of IP technologies and broadband developments – are driving new opportunities and challenges. “These changes require innovative and forwardlooking regulatory measures,” he says. AT

with dr mohammad shakouri vice president, wimax forum With this edition of the Africa Telecoms focusing on the IP Revolution in Africa, do you have any opening comments or views on the Topic when specifically looking at the African Landscape?

What does the IP Revolution mean to you?

The IP Revolution is helping the world to connect in new and amazing ways.

Specifically looking at the African landscape, we see a great opportunity for each country to raise its own global profile. This is because in addition to the IP Revolution, there is another revolution happening: true, scalable, affordable wireless broadband. And the flagship technology for this revolution is WiMAX. The emergence of wired broadband made the Internet integral to people’s lives and made the Internet a mass market consumer phenomenon.

Similarly, cellular voice (as it became affordable) changed the way people communicated and lived. WiMAX is bringing these two shifts together to make the Internet integral to daily life on the go. Just as people no longer have to look for a phone booth, now they won’t have to go to the Internet, the Internet now comes them. Meanwhile, the difficulties inherent in building comprehensive wireline infrastructure

have caused problems in increasing broadband penetration, and therefore economic development, in certain parts of the world. Africa is one such place, with vast geographies that make wireline a tricky proposition. Now, with true mobile broadband provided via WiMAX technology, African nations have the opportunity to truly connect large swaths of their previously unconnected populations.

Studies have shown the economic benefits of broadband penetration. According to a 2009 World Bank report, a high-income economy with an average increase of 10 broadband subscribers per 100 people would enjoy a 1.21% increase in per capita GDP. For developing economies the increase is 1.38%. To give you a sense of the magnitude of this figure, according to the ITU the average growth rate of Developed Economies between 1980 and 2006 was just 2.1%.

All African nations should take a hard look at these numbers, and consider the benefits WiMAX can bring to their countries. Every African nation has the opportunity, through careful use of spectrum policy and government oversight, to connect their countries to the global IP Revolution already occurring today, through WiMAX. There are many examples of other countries that

have successfully managed broadband policies, and WiMAX Forum stands ready to help regulators understand these strategies. We believe that every person has the right to broadband access, and we are happy to represent a technology that can truly deliver this potential today.

Please give a brief overview of where WiMAX currently is in Africa According to our partner and data provider for WiMAX Maps, Informa Telecom & Media, there are 110 WiMAX deployments in Africa. According to WiMAX Forum research done in February of 2009, at least 52 million people in Africa are covered by WiMAX deployments. An update to the POPs number and forecast for Africa will be available by the end of 1Q2010.

Currently in Africa many countries are still rolling out 3G technologies. Does the WiMAX Forum believe it is feasible for 4G technologies to be rolled out en masse into an African market where this is the case?

Africa is not the only area of the world rolling out 3G networks while still considering WiMAX. 3G is an important voice technology, and African nations

December 09 / January 2010 AFRICA TELECOMS 67

will certainly make good use of it in addressing the need for better support of voice services. WiMAX is an IP-based, data-centric technology that perfectly suits the African nations in their drive to increase broadband penetration and to connect to unconnected. In this case, it is helpful to consider what is happening in India. India plans to auction both 3G and then WiMAX spectrum, with the goal to use WiMAX as part of its main thrust to connect 100 million broadband subscribers by 2014. In addition, 95 2G operators across the world have chosen to deploy WiMAX networks. The bottom line is that 3G cannot support the capacity needed for large-scale deployments of broadband services.

Take the United States as an example of this case. AT&T’s 3G network is currently under considerable scrutiny because of its addition of a single, high end device – the iPhone. If AT&T cannot use 3G to satisfy the broadband needs of mobile users, who can? If African countries want to deploy true broadband, they will need a 4G technology such as WiMAX. For a broadband success story, look to Packet One Networks in Malaysia.

P1 is quickly covering a country with traditionally low broadband penetration with a high speed WiMAX network. In just over a year of operations P1 signed up over 130,000 subscribers, and in its first year it signed up 30% of Malaysia’s net new broadband subscribers. This is with a network that does not yet cover most of the country.

With WIMAX being seemingly a true 4G technology do you believe with the implementation of WIMAX that true convergence is attainable? Worldwide, and with specific reference to the African Market. Our thought leadership Interview in this edition is with Harald Braun the CEO of Harris Stratex, where we asked him the same question. With LTE and WIMAX seemingly competing in the same space at the moment, in your opinion do you believe that

WIMAX and LTE can work together or do you believe that one technology will become dominant?

Technically, WiMAX and LTE technology are very similar. We believe WiMAX and LTE will co-exist. WiMAX has passed its proving stage and now offers millions of customers across the globe the freedom of broadband.

WiMAX is gaining traction in both developed and emerging markets and we look forward to greater adoption of WiMAX technology across the globe in 2010. Currently, there are 519 WiMAX deployments in 146 countries. With 110 WiMAX deployments already live in Africa (Nov 2009) and 52,000,000 POPs covered (Feb 2009), we believe WiMAX clearly has a head start in this region.

With current LTE deployments being planned to only start in 2010, do you feel that the time that WIMAX has had to establish itself has been beneficial?

WiMAX is the first multi-megabit, 4G technology available today. It is a wellbacked technology with a future-proof roadmap. We are confident WiMAX remains in a very strong market position, and the time-to-market advantage that you mention is certainly one of them.

WiMAX is the first deployable true mobile Internet technology, meaning it enables Internet at anywhere at any time regardless of the usage model. It has over 500 deployments and conservatively covers more than 430 million POPs worldwide. It has a robust ecosystem that includes the world’s top silicon manufacturers, network equipment manufacturers, device manufacturers, application developers and content owners. It is a mature, tested technology that has proven itself to be effective in a variety of deployment scenarios across the world including Japan, Korea, Malaysia, the Grand Cayman Islands, Russia, Europe, and the United States.

WiMAX has revolutionized the way that people think about mobile Internet,

68 AFRICA TELECOMS December 09 / January 2010

and has enforced change on business models. For example the frustration caused by the royalty structure of the cellular industry caused the WiMAX Ecosystem to band together in the Open Patent Alliance, which has help to create a revolutionary flat IPR structure that has kept WiMAX costs significantly lower than competitive technologies. At their first release (before economies of scale), dual-mode WiMAX-Wi-Fi modules cost considerably less than standard singlemode 3G modules – a technology that has been commercially deployed for a decade. LTE is technically similar to WiMAX, it also an OFDM-based technology. It will take many years for LTE to ramp up its ecosystem and begin to launch significant deployments. And, the first LTE systems (3GPP Release 8) -- which could be commercially available in late 2010 to early 2011-will have performance comparable to Mobile WiMAX Release1.0 systems which have been available since 2008. · Below are a series of quotes from a report commissioned by the UMTS Forum in June 2009 entitled ““LTE Mobile Broadband Ecosystem: the Global Opportunity.”

1. Wide-scale LTE deployment will take some years to achieve, during which time some of the advantages to operators (e.g. Long term cost reduction) will only be partially achieved.”

2. “LTE Devices will need to support pre-LTE standards (to allow non-LTE voice services and roaming to non-LTE regions), and may also need to include other licensed technologies such as video codecs and mobile graphic functions. These incremental IPR licensing costs will increase the cost of devices, which will be an inhibiting factor as the industry tries to get new devices and services accepted in the market.”

3. “A projected six-fold increase in

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global IP traffic between 2007 and 2012 (driven mainly by video) will impact mobile as well as fixed networks, with mobile data projected to double every year from 2008 to 2013. This growth projection will be supported by LTE operators’ initial focus on data services.

Network operators carrying this traffic will benefit from the increased radio network efficiency of LTE; indeed, a recent report published by UMTS Forum indicates that the cost per megabyte for LTE services will be 83% lower than Widebanc Code Division Multiple Access (W-CDMA) and 66% lower than High-Speed Downlink Packet Access (HSDPA).”

4. “The full benefits of LTE will require handheld devices, which are expected to become available in 2011-2012. The risk is that without an adequate supply of devices the ecosystem could replicate the slow introduction of 3G in the early part of this decade.”

5. “To benefit from the efficiencies that LTE holds, mobile operators must undertake a major overhaul of their businesses, migrating from their legacy networks, systems, business processes and working practices. New operational systems and processes will be required to effectively manage the new architecture.”

7. Currently the WIMAX standard is IEEE 802.16e which is equates to WiMAX Release 1. The evolutionary IEEE 802.16m (WiMAX Release 2) has been submitted to the ITU for IMTAdvanced standardization and is said to have a 4 times faster data speed. The presumption is that then the current deployments are all currently using the release 1 standard, are there currently any plans for release 2 deployments worldwide? Specifically then in Africa? · At ITU Telecom World this October 50 companies came out in support of IEEE 802.16m as an IMT Advanced

technology. In addition, at the WiMAX Forum Press Conference at ITU Telecom World leading suppliers and operators expressed their commitment to build and trial WiMAX Release 2. Ecosystem backers included Alvarion, Beceem, Cisco, Clearwire, Huawei, Intel, KT, Motorola, Samsung, Sequans, UQC, Yota and ZTE. In addition to coming out in support of the technology, Yota – a prominent Russian WiMAX operator – stated that it would add WiMAX Release 2 base stations to its WiMAX network upon their availability.

WiMAX Release 2 is planned to be fully backwards compatible with the current WiMAX release, so all current devices will continue to work on the new infrastructure, and new devices will continue to function on the current infrastructure.

The developing 802.16m standard offers new capabilities and efficiencies to meet the challenging IMT-Advanced requirements, with many commercial deployments which promise peak performance rates of more than 300 Mbps in the 2011-2012 timeframe. Further, the IEEE’s IMT-Advanced proposal documents that, according to the ITU-R’s rigorous definition reflecting aggregate throughput delivered to multiple users in a practical deployment, using 4X2 MIMO in the urban microcell scenario with only a single 20 MHz TDD channel available system wide, the 802.16m system can support both 120 Mbit/s downlink and 60 Mbit/s uplink per site simultaneously. This is breakthrough performance. Higher data rates can be obtained with additional spectrum resources or more complex antenna schemes. The WiMAX Forum Release 2 profile will also incorporate these capabilities for improved VoIP capacity, spectral efficiency, latency, handover speed, cell range, and coverage, with support for wider operating bandwidth in both TDD and FDD duplexing. One of our top priorities is to bring WiMAX Forum Certified Release 2 networks and

70 AFRICA TELECOMS December 09 / January 2010

devices to market by the end of 2011.

Even better, with double digit WiMAX deployment growth every month, the next release of WiMAX will have an even more substantial installed base upon which to build.

8. Spectrum regulation is clearly an issue worldwide, however in Africa with many regulators being slow at allocating spectrum even to current operators for GSM or CDMA networks, has this been a hindrance to further WIMAX deployments in Africa? If so how do you feel that this situation could be improved?

The WiMAX Forum Regulatory Working Group (RWG) has been working hard to gain access to spectrum for WiMAX in Africa. Our approach has consisted of the following – · Personal engagement with regulators, mainly through the excellent work of RWGs Middle East & Africa Regional Task Group (MeaRWG). · WiMAX Forum responses to formal public consultations and requests for information directed specifically to the WiMAX Forum. We have provided a very significant number of consultation responses to African regulators. · Facilitate an Informal engagement with African regulators during ITU-R (ITU Radiocommunications Sector) meetings, and indeed the recent ITU World Telecom 2009 event in Geneva during which we met several important politicians and regulators from African Countries. Our ITU-R communications is mainly via our active participation in ITU-R and ITU-D. We have also participated in ITU-D symposia. AT

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While telecommunications exhibitions in Europe are flagging, the AfricaCom conference held in Cape Town in November drew record crowds.

BY Lesley Stones

M

ore than 4,000 delegates from 120 countries attended this 12th annual event, confirming that operators and investors see Africa as the last great growth market on the planet. Network equipment supplier Alvarian had just exhibited at telecoms events in Geneva and Amsterdam, and found both gatherings muted compared to the thriving atmosphere at AfricaCom, said Rick Rogers, MD of Alvarian South Africa.

“The high attendance and the level of the debates held at AfricaCom is testimony to the continent’s great opportunities,” agreed Julie Rey of organisers Informa Telecoms.

“While most of the world is facing challenging economic conditions, African companies are leading the way with innovative models and services which enable continued growth.”

In the exhibition hall, 200 operators, network infrastructure suppliers and solutions developers demonstrated their latest products and services. In the auditoriums, CEOs and other top executives from Africa’s largest operators including MTN, Vodacom, Zain, Etisalat and Orange shared their strategies, hopes and fears. They were joined by ZTE, Telecom Italia and Telenor, triggering speculation about the ambitions of foreign players for African expansion.

On the conference floor, optimism was tempered with reality. Last year debates had centred on consolidation and speculation about which players were likely to be gobbled up. The ensuing economic crisis has made companies more circumspect in their spending, and although opportunities for acquisitions were discussed, players were more focused on how to protect, sustain and grow their existing operations.

Yet despite agreement about the massive markets still to be conquered, a clear message was that the easy times are over. The operators admit they need to adopt

72 AFRICA TELECOMS December 09 / January 2010

new tactics to make a profit in countries where already poor consumers are trying to pare back their spending even further.

South Africa has been one of the continent’s cellular powerhouses for the past 15 years, but in recent months both MTN and Vodacom have seen subscriber additions slow, and MTN actually suffered a dip in user numbers. “In South Africa the market has reached saturation,” said MTN’s regulatory affairs executive Zolisa Masiza.

Two ideas discussed more enthusiastically than in the past were the sharing of infrastructure to cut costs, and outsourcing some activities previously seen as a core component of the business. Other sessions debated lobbying governments for relief from arbitrary taxes, arguing against politically-imposed call fees, ways to boost the volume of broadband services, and the need to offer locally-developed data content to pull consumers into broadband.

The tough economic environment and increased competition meant operators must cut their running costs to maintain their

other countries are also reporting wavering growth. To combat the decline, operators need to boost non-voice services such as mobile banking and the ability to buy goods and services over their networks, which are revenue generators as well as useful ways of locking-in a customer.

So far data services account for only 13% of cellular revenue in Africa, compared with 20% globally, but Informa predicts it will climb to 18% by 2014. That will still see less data consumption in Africa than in the rest of the world, where the revenue contribution is tipped to rise to a third.

Africa’s use of data will also remain less sophisticated, with Informa predicting that basic SMS will contribute $3bn of the expected $4bn spent on data services this year.

Zain Africa CEO Chris Gabriel said the old model for cellular operators had gone and they needed to adapt to a collaborative world. “The rules of the game have changed. It’s not about customer growth - it’s about profitable customer growth.”

Rivals must learn to share core infrastructure such as base

“While most of the world is facing challenging economic conditions, African companies are leading the way with innovative models and services which enable continued growth.” margins, said Informa’s principal analyst Nick Jotischky.

They must also figure out how to offer relevant and affordable data services to win customer loyalty and compensate for the declining profits from voice calls. “Customer retention is absolutely vital in the face of competition,” he said.

By 2014 the world should have 6,4-billion SIM cards in operation, with a penetration rate of 88% since some people own multiple accounts. Yet Africa would continue with its historic lag in take-u, Jotischky said, and subscriber growth in some countries had already begun to slow despite the huge untapped populations. Many African countries still have a penetration rate of less than 20%, but with 80% percent of countries already having more than three operators the rivalry was high.

“Competition will remain intense, but with the right business model and the right level of investments alternative players can put the incumbents under pressure,” Jotischky said. “Successful innovation will continue to be at the heart of growth in Africa.

Innovation is also vital for the operators to differentiate between each other.”

SA and Nigeria currently rank in the world’s top 20 countries for subscriber growth. Yet SA’s position has begun to slide, and

stations to roll out network coverage more quickly and cheaply.

They should look at outsourcing activities such as information technology support, call centres and even the running of their network. Operating a network was not an operator’s core competency, but owning the customer was, Gabriel said.

One trend he highlighted was for new players to begin operating and instantly launch a price war to win customers, simply in the hope of being bought out by a rival. “Three, four or five operators are coming in and competing on price and that’s unsustainable. Some of the prices are ridiculous. They are buying customer numbers to be sold to bigger players,” he said.

An unwelcome side-effect is that churn is increasing by up to 400% on rates that are already high.

Serious players needed to fight back by focusing on customer retention, which they could achieve by developing compelling data content locally relevant to people surfing the internet on a cellphone. “Data is key. We are seeing a passionate demand in Africa from the youth in particular looking for content, but local content. Operators need to get very savvy and deliver content that’s relevant to their customers.”

Since 77% of Africans have no bank account, a crucial move December 09 / January 2010 AFRICA TELECOMS 73

was to offer mobile banking applications that let them deposit, transfer and withdraw cash and pay bills for goods and services like pizzas and taxis. “The mobile phone will be the wallet of tomorrow,” Gabriel said.

Zain already has 10-million customers signed up for its mobile banking service and 1-million use it on a day-to-day basis to transfer cash or receive their salaries.

Gabriel also told the conference that Zain Africa was not for sale. But he failed to quash rumours that grew more persistent after Zain CEO Saad al-Barrak admitted hiring consultants for advice on the best way forward for its operations in 16 African countries. Gabriel conceded that although he aims to grow the division through potential acquisitions, any decision to sell would be made by shareholders over whom he has no influence.

Results from Kuwait-listed Zain have confirmed its African arm is not as profitable as expected. That could be mitigated by a decision to outsource many of its activities. “We are moving to outsource network building and operations and call centres and

“Most important for us is to go where the customers are, and that’s in the rural areas. So we need to find new innovative solutions to improve our cost efficiency.”

Orange has set up 1,000 solar base stations and sourced lowcost handsets for low-spending customers who just want voice and SMS. In poor countries the people who still lack a handset are amongst the poorest on the planet, so operators must cut their prices and bring in low cost handsets. “But it’s tough to roll out more network when the Arpus are low,” Rennard said. Growth was available, but there was no obvious way to tap those lowend markets, especially in counties where there are too many rivals to make it viable to fund more network roll-out.

At the same time the operators must serve more sophisticated customers too, and for them the keys issues are broadband and mobile payments. “Mobile payments is now a basic part of your business,” Rennard said.

While cellphone penetration is low, the state of broadband

“While most of the world is facing challenging economic conditions, African companies are leading the way with innovative models and services which enable continued growth.”

information technology,” said Gabriel. “Owning the customer and knowing the customer is the name of the game and if you can outsource to best-of-breed vendors who do this for a living you get savings. Zain will realise savings of 30% year-on-year from outsourcing.”

Initial resistance from employees was fading as they saw new opportunities to increase their skills and work abroad once they were employed by a specialist outsourcer. Gabriel predicted that other operators would follow suit, and would also finally accept that collaboration with rivals was crucial for infrastructure sharing to cut their capital expenditure.

Zain Africa now shares 1,400 towers with other players, letting it spend less to achieve the same coverage.

“If you are moving into lower Arpu segments you can’t spend what you have been spending, so we need to get smarter about sharing. We need to change our thought-processes. Collaboration is the most effective and quickest way to move.”

Orange earns 90% of its revenue from voice and SMS, its head of international operations Marc Rennard told the conference.

74 AFRICA TELECOMS December 09 / January 2010

internet access is appalling. Every speaker agreed it was too scarce and too expensive, with Internet World Statistics calculating that only 6.8% of Africans have any internet access at all.

Intelsat’s regional vice president Flavien Bachabi said the communications gap was being closed by cellphones, but warned that another gap was opening around internet access.

But it was not their fault, the operators claimed. The three major problems were a lack of disposable income, low literacy rates and a lack of basic infrastructure such as electricity, they argued.

Manufacturers must develop more energy-efficient equipment - perhaps using solar and wind power - since there is no electricity supply in many places, said Donglin Shen, vice president of wireless technology and marketing for ZTE. But that would probably mean some design compromises to match people’s needs to the technologies available. AT

Tenders Kenya SUPPLY, INSTALLATION AND COMMISSIONING OF IP TELEPHONY SYSTEM The Kenya Power & Lighting Company Limited (KPLC) Tender No. KPLC1/4/3/1/PT/ ITT/19/09

supplied by www.tenderscan.co.za

Save when responding to KPLC’s request for clarification, bidders shall not contact or discuss any aspect of their tenders with KPLC after the closing date before receipt of notification of award of tender or letters of regret, as applicable. Any such contact shall lead to disqualification of the tenders.

Tel: (012) 312 0338/0563

29 January 2010.

General enquiries can be made during the office ours 08:00 - 16:00 Mondays to Fridays:

Contact Information: Theo Thumbran tel: (+2711) 895 3021 or E-mail: theo@southafrica.net

Tenders should received on or before 8th January 2010 at 10:00 and can be addressed and delivered to:

Mr Thinus Prinsloo Tel: (021) 312 0724 Fax: (021) 312 091

The Company Secretary The Kenya Power & Lighting Company Ltd. Stima Plaza, 7th Floor, Kolobot Road.

PO Box 30099-00100 Nairobi, Kenya

SOUTH AFRICA

Mr Letlhogonolo Makhafola Tel: (012) 312 0338/0563 Fax: (021) 312 0912 E-mail: makhal@health.gov.za

SOUTH AFRICA LEAST COST ROUTING CONTRACT

The Kenya Power & Lighting Company Linited (KPLC) invites tenders from interested Manufacturers for the supply of the following items: Supply, Installation & Commissioning of IP Telephony System at Stima Plaza.

The Tender Documents detailing the requirements may be obtained from the Office of the Chief Manager, IT & Telecommunications on the 6th Floor, Stima Plaza, Kolobot Road, Nairobi on normal working days from Friday 4th December, 2009 between 9:00am and 12:30pm and 2:00pm & 4:00pm.

A non- refundable fee of KShs,3,000,00 or equivalent in US$ shall be made in Cash or by Banker’s Cheque at Stima Plaza, 1st Floor, Costing Office.

Completed Tender Documents are to be enclosed in a plain sealed envelope marked “TENDER NO. KPLC1/4/3/1/PT/TT/19/09: SUPPLY, INSTALLATION & COMMISSIONING OF IP TELEPHONY SYSTEM AT STIMA PLAZA” Tenders will be opened on the same day at 10:30am in the Stima Plaza Auditorium, Nairobi and tenderers or their representatives who wish to witness the opening are welcome to do so.

SOUTH AFRICA

IT RELATED SERVICES South African Tourism South African Tourism invites proposals from reputable service providers with an exceptional track record to provide the following IT-related services:

INTERNET AND E-MAIL SERVICES National Department of Health, Pretoria: Tender No. NDOH 30/2009-2010 Appointment of a bidder for the provision of internet and email services to the National Department of Health, for a period not exceeding twenty four months with an option of twelve months extension.

Tender Documents can be obtained and delivered to Department of health, 231 Proes Street, Hallmark Building, Pretoria, 0002, or Private Bag x828, Pretoria, 0001.

Technical enquiries: Aubrey Mabuza Tel: (+2712) 312 0000 Bid enquiries: Mr Letlhogonolo Makhafola

1. Migration of e-mail infrastructure to cloud-based service 2. IT support 3. Voice and Data Services Prospective bidders can submit proposals for all 3 services or for a specific service and should clearly indicate in their proposals which part of the services the are proposing.

A bid document, which outlines the scope of services in detail, will be available from 09:00 on Monday, 1 December 2009 at www.southafrica.net/satourism Completed documents must be dropped inside the tender box situated at reception of South African Tourism: 90 Protea Road, Chislehurston, Sandton by no later than 11:00 on

eThekwini Municipality: Equiry 1A-4790: Provision of least cost routing contract for a 24 month period.

The eThekwini Municipality requires a least cost routing proposal to minimise cost of calls from a Land Line for: 1. Local calls ( Neotel and Telkom) 2. National calls 3. International calls 4. Cell Calls (MTN, Vodacom and Cell C) The RFP documentation can be downloaded from the following eThekwini website: http://www.durban.gov.za/ durban/government/scm/public The RFP is to be addressed to the HEAD: GIPO and must be clearly marked “RFP: Provision of least cost routing contract for a twentyfour month period - Enquiry 1A-4790” The proposal must be placed in the tender box located on the Ground Floor, Municipal Building, 166 K.E. Masinga Road (formerly known as Old Fort Road), Durban, 4001 on or before 11:00, on 201001-22.

No electronic submissions will be accepted.

December 09 / January 2010 AFRICA TELECOMS 75

THE LAST WORD

Google Makes Waves A brand new offering by Google shrinks the global village and redefines networking.

A

fter reading the considerable hype online about the much touted Google Wave, Africa Telecoms took the time to watch the ‘Loooong Video’ (and yes it is long 1hr20min to be exact), presented by Google to highlight its groundbreaking Google Wave.

To our considerable surprise, our reaction was one of huge excitement and awe at what Google was proposing.

However with Google Wave not being in operation in Africa the only experience has been in watching the video posted on You Tube. This video was presented by Lars Rasmussen who, with his brother Jens Rasmussen, founded a ‘small’ startup Where 2 Technologies, which was acquired by Google in 2004, now known as Google Maps.

Lars explains the many uses of Google Wave, from conventional e-mail type messaging to IM (in the same wave dependant on whether the recipient is online or not), to blogging, to video sharing, to collaborative document editing. And all this takes place on the same Wave.

To find a definition of a Wave is fairly difficult as the technology is still in development and state of the art. In fact, we have never seen anything like it before. However, Lars Rasmussen sums it up best at the beginning of his video presentation asking ‘If one was to design E-mail today how would it function and what would it look like’ and this has been done to include some of our favourite social networking and

informational tools.

It is truly an amazing technology with apps fondly named Mappy (Google Maps for Waves), Bloggy (A Blogging App – that updates your blogs in real time character by character as you type), Tweety (Clearly a collaboration with Twitter to include your Tweets to your Wave) and our favourite Rosy.

Rosy is an amazing IM and e-mail tool whereby as you type in your messages or e-mails, they are immediately translated into any one of 40 languages. And this can be done in real time while having an IM chat with someone from another country speaking a foreign language.

With these kinds of apps and collaborative tools, the Global Village is truly shrinking. The possibility of allowing collaborations across geographical and linguistic boundaries is mind-boggling. For instance, individuals in Cairo, New York, Cape Town and Shanghai, can all work and share a single document in real time in their own home language, with all Wave participants being able to understand one another with the aid of Rosy.

With this the final word from the Africa Telecoms team for 2009, and moving into the next decade of the 21st century, we find it difficult to put this topic to bed, but as the last word for this decade, we as a team are excited about the future of Telecoms in Africa. And we do look forward to Waving at colleagues, collaborators and friends across Africa with Google.

THE AUTHOR | Bradley Shaw is managing editor of Africa Telecoms magazine.

76 AFRICA TELECOMS December 09 / January 2010